Type: Working Paper
Firm size and monetary policy transmission, evidence from German business survey data
Working Paper, EUI ECO, 2000/12
EHRMANN, Michael, Firm size and monetary policy transmission, evidence from German business survey data, EUI ECO, 2000/12 - https://hdl.handle.net/1814/741
Retrieved from Cadmus, EUI Research Repository
Using business survey data oil German manufacturing firms, this paper provides tests for hypotheses formulated in capital market imperfection theories that predict distributional effects in the transmission mechanism of monetary policy. Effects of monetary policy shocks on the business conditions of firms of several size classes are analysed, with the finding of considerable asymmetry. As predicted by theory, small firms are affected more strongly than large firms. To test whether these effects are reinforced when the economy is in a business cycle downturn, the paper employs a new estimation strategy: impulse response analysis conditional on Markov-switching regimes. The findings are supportive of the theoretical hypotheses: in a business cycle downturn, the distributional effects of monetary policy transmission are indeed reinforced.
Digitised version produced by the EUI Library and made available online in 2020.
Cadmus permanent link: https://hdl.handle.net/1814/741
Series/Number: EUI ECO; 2000/12
Publisher: European University Institute
Earlier different version: http://hdl.handle.net/1814/4910
Version: The article is a revised version of a chapter  of the author’s EUI PhD thesis, 2000