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The trade credit channel and monetary policy transmission: empirical evidence from U.S. panel data

Fatih Altunok, Karlyn Mitchell and Douglas Pearce ()

MPRA Paper from University Library of Munich, Germany

Abstract: We investigate whether a trade credit channel mitigates monetary policy tightenings intended to slow economic activity. Unlike prior research, we study this issue using quarterly firm-level data for nearly the universe of non-financial public corporations and using more precise measures of their credit market access. We estimate firm-level models of the supply and demand for trade credit from 1988 to 2008. Our evidence suggests that policy tightenings evoke a flow of trade credit from public firms commensurate with their credit market access which goes primarily to private firms, a previously undocumented finding.

Keywords: trade credit; trade credit channel; monetary policy transmission (search for similar items in EconPapers)
JEL-codes: E5 E52 G1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-ger, nep-mac and nep-mon
Date: 2015-08-10
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