Measuring regional effects of monetary policy in CanadaGeorge Georgopoulos Applied Economics, 2009, vol. 41, issue 16, pages 2093-2113 Abstract: This article measures monetary policy shocks and examines whether the effects of such shocks have differential regional effects in Canada. We identify three possible sources of regional effects: differences in the importance of interest-sensitive industries, differences in the contribution of exports to output and differences in the proportion of small relative to large firms. Using the overnight interest rate as the instrument of monetary policy, we present impulse responses of industry output from a recursive vector autoregression, which incorporates a cointegrating relation. The results show that manufacturing and primary industries are the most interest sensitive. We conduct impulse responses of provincial employment from a monetary contraction. The results show that Newfoundland and Prince Edward Island (PEI), primary industry-based provinces, are strongly and adversely affected by a monetary contraction. Manitoba, Saskatchewan and Alberta, also primary-based, are also affected. Ontario, which is manufacturing-based, is also affected but to a lesser extent. The response of Quebec, New Brunswick, Nova Scotia and British Columbia are not statistically significant. Date: 2009 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:taf:applec:v:41:y:2009:i:16:p:2093-2113 Ordering information: This journal article can be ordered from Access Statistics for this article Applied Economics is edited by Mark Taylor More articles in Applied Economics from Taylor and Francis Journals |
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