Economics at your fingertips  

Unconventional monetary policy, funding expectations, and firm decisions

Annalisa Ferrando, Alexander Popov and Gregory F. Udell

European Economic Review, 2022, vol. 149, issue C

Abstract: We study the transmission of (unconventional) monetary policy to the real sector when firm decisions depend on both current and future credit market conditions. For a given level of current credit access, investment and employment increase more for firms expecting bank credit to improve in the future. Three separate unconventional policies by the ECB – the OMT, the introduction of negative rates, and the CSPP – improved expectations of future credit access for SMEs borrowing from banks that were expected to increase SME lending due to the policy. Our results enhance our understanding of the bank balance sheet channel of monetary policy.

Keywords: Unconventional monetary policy; Funding expectations; Corporate investment (search for similar items in EconPapers)
JEL-codes: D22 D84 E58 G21 H63 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Unconventional monetary policy, funding expectations, and firm decisions (2021) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.euroecorev.2022.104268

Access Statistics for this article

European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer

More articles in European Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2023-11-08
Handle: RePEc:eee:eecrev:v:149:y:2022:i:c:s001429212200157x