Market Power, Financial Constraints, and Monetary Transmission

Romain Duval, Davide Furceri, Raphael Lee and Marina Tavares

AEA Papers and Proceedings, 2023, vol. 113, 99-104

Abstract: There is growing evidence that corporate market power is increasing and affecting monetary policy transmission. This paper develops a partial equilibrium model that highlights the role of financial constraints in shaping the role of markups for the response of firms to monetary policy shocks. We find support for such a role using a large cross-country firm-level dataset for 14 advanced economies.

JEL-codes: D21 E43 E52 G31 G32 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1257/pandp.20231005

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