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Monetary Policy and Intangible Investment

Author

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  • Cooper Howes
  • Alice von Ende-Becker

Abstract

Cooper Howes and Alice von Ende-Becker provide a simple framework to explain how the financing structure and depreciation rate of intangible investment cause it to respond differently to changes in interest rates and then analyze what these properties imply for the efficacy of monetary policy. Building on the findings of Döttling and Ratnovski (2021), they show that monetary policymakers may need to adjust their approach to managing the economy as the share of intangible investment continues to grow.

Suggested Citation

  • Cooper Howes & Alice von Ende-Becker, 2022. "Monetary Policy and Intangible Investment," Economic Review, Federal Reserve Bank of Kansas City, vol. 107(no.2), March.
    • Handle: RePEc:fip:fedker:93903
    DOI: 10.18651/ER/v107n2HowesvonEndeBecker
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    References listed on IDEAS

    as
    1. Gompers, Paul & Kovner, Anna & Lerner, Josh & Scharfstein, David, 2008. "Venture capital investment cycles: The impact of public markets," Journal of Financial Economics, Elsevier, vol. 87(1), pages 1-23, January.
    2. Hall, Bronwyn H. & Lerner, Josh, 2010. "The Financing of R&D and Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 609-639, Elsevier.
    3. Caggese, Andrea & Pérez-Orive, Ander, 2022. "How stimulative are low real interest rates for intangible capital?," European Economic Review, Elsevier, vol. 142(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Monetary policy; Investments;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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