The cost channel of monetary policy: evidence from euro area firm-level survey data

Ugo Albertazzi, Annalisa Ferrando, Sofia Gori and Judit Rariga

No 3097, Working Paper Series from European Central Bank

Abstract: This paper explores empirically the cost channel of monetary policy transmission during the recent period of monetary policy tightening in the euro area. We combine unique data on firms’ selling price expectation from the Survey on the access to finance of enterprises (SAFE), information on firms’ borrowing from the euro area-wide credit register (AnaCredit) and ECB monetary policy surprises. Firms revise upwards their one-year-ahead selling price expectations following monetary announcements in a tightening cycle and this effect increases in firms’ working capital exposure. The paper provides supportive evidence on the existence of a cost channel of monetary policy, adding to our understanding of monetary policy transmission to firms in the euro area. JEL Classification: G30, E52, D84

Keywords: firm financing; monetary policy; selling price expectations (search for similar items in EconPapers)
Date: 2025-08
New Economics Papers: this item is included in nep-cba, nep-eec, nep-inv and nep-mon
Note: 451871
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20253097

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