Does Monetary Policy Have Asymmetric Effects? A Look at the Investment Decisions of Italian Firms

Eugenio Gaiotti and Andrea Generale ()
Additional contact information
Andrea Generale: Bank of Italy

Giornale degli Economisti, 2002, vol. 61, issue 1, 29-59

Abstract: The paper assesses the quantitative importance of a channel of monetary transmission operating through firms’ balance sheets. It studies the effects of monetary policy on the investment behaviour of various categories of Italian firms, using a panel from the Company Accounts Data Service (Centrale dei Bilanci) and a detailed reconstruction of the user cost of capital at firm level. We estimate that a considerable portion possibly up to one third) of the overall effects of monetary policy is transmitted through the balance-sheet channel. Small firms, firms which have a larger share of assets that cannot be used as collateral, firms with less cash flow or less liquidity are more affected by monetary policy. In quantitative terms, the difference in the response of investment by different types of firms turns out not to be negligible.

Keywords: investment; monetary transmission; user cost of capital (search for similar items in EconPapers)
JEL-codes: E22 E50 (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
ftp://ftp.gde.unibocconi.it/gde_articles/2002/GDE_V61_N1_P29-59.pdf (application/pdf)

Related works:
Working Paper: Does monetary policy have asymmetric effects? A look at the investment decisions of Italian firms (2001)
Working Paper: Does monetary policy have asymmetric effects? A look at the investment decisions of Italian firms (2001)
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: https://EconPapers.repec.org/RePEc:gde:journl:gde_v61_n1_p29-59

Ordering information: This journal article can be ordered from
http://www.gde.unibocconi.it

Access Statistics for this article

More articles in Giornale degli Economisti from GDE (Giornale degli Economisti e Annali di Economia), Bocconi University via Sarfatti, 25 - 20136 Milano (Italy).
Bibliographic data for series maintained by Erika Somma ( this e-mail address is bad, please contact ).