Corporate investment and monetary policy transmission in Canada

Min Jae Kim and Jonathan Witmer

No 2020-26, Staff Analytical Notes from Bank of Canada

Abstract: Unexpected changes in interest rates lead small firms to materially change their investment rate. Large firms, in contrast, show a smaller response. This suggests both that financial conditions are an important channel for transmitting monetary policy and that firm characteristics can help us better understand fluctuations in business investment.

Keywords: Firm dynamics; Monetary policy; Monetary policy: transmission of (search for similar items in EconPapers)
JEL-codes: D92 G32 (search for similar items in EconPapers)
Date: 2020-11
New Economics Papers: this item is included in nep-bec, nep-cfn and nep-mon
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