Revisiting the monetary transmission mechanism through an industry‑level differential approach

Sangyup Choi, Tim Willens () and Seung Yong Yoo ()
Additional contact information
Tim Willens: Bank of England, Postal: Bank of England, Threadneedle Street, London, EC2R 8AH
Seung Yong Yoo: Yonsei University

No 1024, Bank of England working papers from Bank of England

Abstract: We combine industry‑level data on output and prices with monetary policy shock estimates for 105 countries to analyse how the effects of monetary policy vary with industry characteristics. Next to being interesting in their own right, our findings are informative on the importance of various transmission mechanisms, as they are thought to vary systematically with the included characteristics. Results suggest that monetary policy has greater output effects in industries featuring assets that are more difficult to collateralise, consistent with the credit channel, followed by industries producing durables, as predicted by the interest rate channel. The credit channel is stronger during bad times as well as in countries with lower levels of financial development, in line with financial accelerator logic. We do not find support for the cost channel of monetary policy, nor for a channel running via exports. Our database (containing estimated monetary policy shocks for 177 countries) may be of independent interest to researchers.

Keywords: Monetary policy transmission; industry growth; financial frictions; heterogeneity in transmission; monetary policy shocks (search for similar items in EconPapers)
JEL-codes: E32 E52 F43 G20 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2023-05-26
New Economics Papers: this item is included in nep-ban, nep-fdg, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.bankofengland.co.uk/-/media/boe/files/ ... ission-mechanism.pdf Full text (application/pdf)

Related works:
Journal Article: Revisiting the monetary transmission mechanism through an industry-level differential approach (2024)
Working Paper: Revisiting the Monetary Transmission Mechanism through an Industry-Level Differential Approach (2023)
Working Paper: Revisiting the Monetary Transmission Mechanism Through an Industry-Level Differential Approach (2022)
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:boe:boeewp:1024

Access Statistics for this paper

More papers in Bank of England working papers from Bank of England Bank of England, Threadneedle Street, London, EC2R 8AH. Contact information at EDIRC.
Bibliographic data for series maintained by Digital Media Team ().