Market Power and Monetary Policy Transmission /

We show that firms' market power dampens the response of their output to monetary policy shocks, using firm-level data for the United States and a large cross-country firm-level dataset for 14 advanced economies. The estimated impact of a firm's markup on its response to a monetary policy...

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Autore principale: Duval, Romain
Altri autori: Furceri, Davide, Lee, Raphael, M. Tavares, Marina
Natura: Periodico
Lingua:English
Pubblicazione: Washington, D.C. : International Monetary Fund, 2021.
Serie:IMF Working Papers; Working Paper ; No. 2021/184
Soggetti:
Accesso online:Full text available on IMF
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245 1 0 |a Market Power and Monetary Policy Transmission /  |c Romain Duval, Davide Furceri, Raphael Lee, Marina M. Tavares. 
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490 1 |a IMF Working Papers 
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520 3 |a We show that firms' market power dampens the response of their output to monetary policy shocks, using firm-level data for the United States and a large cross-country firm-level dataset for 14 advanced economies. The estimated impact of a firm's markup on its response to a monetary policy shock is large enough to materially affect monetary policy transmission. We also find some evidence that the role of markup in monetary policy transmission, while independent from other channels, is greater for firms whose characteristics - notably size and age - are likely to be associated with greater financial constraints. We rationalize these findings through a simple partial equilibrium model in which borrowing constraints amplify disproportionately low-markup firms' responses to changes in interest rates. 
538 |a Mode of access: Internet 
650 7 |a Central Banks and Their Policies  |2 imf 
650 7 |a Market Structure and Pricing  |2 imf 
650 7 |a Monetary Policy  |2 imf 
650 7 |a Production, Pricing, and Market Structure  |2 imf 
650 7 |a Size Distribution of Firms  |2 imf 
700 1 |a Furceri, Davide. 
700 1 |a Lee, Raphael. 
700 1 |a M. Tavares, Marina. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2021/184 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2021/184/001.2021.issue-184-en.xml  |z IMF e-Library