IDEAS home Printed from https://ideas.repec.org/a/taf/regstd/v41y2007i6p797-808.html
   My bibliography  Save this article

The Regional Transmission of UK Monetary Policy

Author

Listed:
  • Sheila C. Dow
  • Alberto Montagnoli

Abstract

Dow S. C. and Montagnoli A. (2007) The regional transmission of UK monetary policy, Regional Studies 41, 797-808. Concerns have been raised in the media about a 'one-size-fits-all' monetary policy for the UK. If there are diverse economic conditions in different regions, then a unitary monetary policy cannot suit all. The purpose of this paper is to explore this issue further by breaking it down into two separate issues. First there is the more conventional way of considering the question, in terms of the effect of a particular interest rate change on regions experiencing different economic conditions. This requires a consideration of the nature and causes of regional economic disparities in the UK, and how these might be affected by particular interest rate changes. But there is further the question of how monetary policy is transmitted to the different regions. The possibility is considered that there may be regional differences in how a particular monetary policy is translated into different financial conditions in different regions. In other words there may be a regional dimension to the transmission process itself. The focus here will be on the regional structure of the financial sector and financial behaviour, and in particular the credit market. The argument is explored further with a comparison of Scottish and UK data. Dow S. C. et Montagnoli A. (2007) La transmission au niveau regional de la politique monetaire du Royaume-Uni, Regional Studies 41, 797-808. Les medias ont suscite quelques inquietudes quant a la mise en oeuvre d'une politique monetaire 'unique' au R-U. Tout en remettant en question l'idee selon laquelle un ajustement donne du taux d'interet reflete parfaitement la transmission de la politique monetaire, on considere si, oui ou non, il existe des variations regionales de la transmission de la politique monetaire sous diverses conditions financieres, et donc sous diverses conditions economiques, suivant la region. L'analyse laisse supposer que, tandis que la politique monetaire du R-U pourrait avoir l'impact le plus grand sur les regions centrales a court terme, l'impact le plus durable a long terme se ferait sur les regions peripheriques. Une comparaison des donnees aupres de l'Ecosse et du R-U en fournit quelques preuves. Ecosse R-U Politique monetaire Economies regionales Dow S. C. und Montagnoli A. (2007) Die regionale Ubertragung der britischen W ahrungspolitik, Regional Studies 41, 797-808. In den Medien ist Kritik an einer 'gleichmacherischen' Wahrungspolitik fur Grossbritannien laut geworden. Wir stellen die Annahme in Frage, dass eine gegebene Zinssatzanderung vollstandig wiedergibt, wie Wahrungspolitik ubertragen wird, und ziehen die Moglichkeit in Betracht, dass es regionale Unterschiede dabei geben kann, wie die Wahrungspolitik in verschiedenen Regionen in verschiedene finanzielle (und somit wirtschaftliche) Bedingungen ubersetzt wird. Aus der Analyse geht hervor, dass sich die britische Wahrungspolitik zwar kurzfristig am starksten auf die zentralen Regionen auswirkt, langfristig aber in den peripheren Regionen eine grossere und nachhaltige Wirkung zeigt. Belege hierfur liefert ein Vergleich von Daten aus Schottland und Grossbritannien. Schottland GB Wahrungspolitik Regionalwirtschaften Dow S. C. y Montagnoli A. (2007) La transmision regional de la politica monetaria britanica, Regional Studies 41, 797-808. En el Reino Unido la politica monetaria con un enfoque unico para todos ha suscitado preocupacion en los medios de comunicacion. Cuestionando la suposicion de que un determinado cambio en la tasa de interes refleja totalmente el modo en que se transmite la politica monetaria, consideramos la posibilidad de que podrian existir diferencias regionales en cuanto a como se traduce en diferentes regiones la politica monetaria en distintas condiciones financieras. Este analisis indica que si bien la politica monetaria britanica podria tener a corto plazo una mayor influencia en las regiones centrales, se observa una mayor repercusion sostenida a largo plazo en las regiones perifericas. Como ejemplo comparamos datos escoceses y britanicos. Escocia GB Politica monetaria Economias regionales

Suggested Citation

  • Sheila C. Dow & Alberto Montagnoli, 2007. "The Regional Transmission of UK Monetary Policy," Regional Studies, Taylor & Francis Journals, vol. 41(6), pages 797-808.
    • Handle: RePEc:taf:regstd:v:41:y:2007:i:6:p:797-808
    DOI: 10.1080/00343400601142779
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00343400601142779
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00343400601142779?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Joe Ganley & Chris Salmon, 1997. "The Industrial Impact of Monetary Policy Shocks: Some Stylised Facts," Bank of England working papers 68, Bank of England.
    2. Gabe J. de Bondt, 2000. "Financial Structure and Monetary Transmission in Europe," Books, Edward Elgar Publishing, number 2015.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. de Groot, Oliver & Hauptmeier, Sebastian & Holm-Hadulla, Fédéric & Nikalexi, Katerina, 2020. "Monetary policy and regional inequality," Working Paper Series 2385, European Central Bank.
    2. Steve Cook, 2012. "β-convergence and the Cyclical Dynamics of UK Regional House Prices," Urban Studies, Urban Studies Journal Limited, vol. 49(1), pages 203-218, January.
    3. Alberto Montagnoli & Jun Nagaysu, 2013. "An investigation of housing affordability in the UK regions," Working Papers 1316, University of Strathclyde Business School, Department of Economics.
    4. Degryse, Hans & Matthews, Kent & Zhao, Tianshu, 2018. "SMEs and access to bank credit: Evidence on the regional propagation of the financial crisis in the UK," Journal of Financial Stability, Elsevier, vol. 38(C), pages 53-70.
    5. Eiblmeier, Sebastian, 2023. "Differential Effects of Unconventional Monetary Policy," Hannover Economic Papers (HEP) dp-707, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    6. Masagus M. Ridhwan & Henri L. F. Groot & Piet Rietveld & Peter Nijkamp, 2014. "The Regional Impact of Monetary Policy in Indonesia," Growth and Change, Wiley Blackwell, vol. 45(2), pages 240-262, June.
    7. John K. Ashton & Andros Gregoriou, 2014. "The Influence of Banking Centralization on Depositors: Regional Heterogeneities in the Transmission of Monetary Policy," Regional Studies, Taylor & Francis Journals, vol. 48(9), pages 1467-1482, September.
    8. Sheila Dow & Alberto Montagnoli & Oreste Napolitano, 2012. "Interest Rates and Convergence across Italian Regions," Regional Studies, Taylor & Francis Journals, vol. 46(7), pages 893-905, October.
    9. Korobilis, Dimitris & Gilmartin, Michelle, 2010. "The dynamic effects of U.S. monetary policy on state unemployment," MPRA Paper 27596, University Library of Munich, Germany.
    10. Ridhwan, M.M. & Nijkamp, P. & Rietveld, P., 2008. "Regional development and monetary policy : a review of the role of monetary unions, capital mobility and locational effects," Serie Research Memoranda 0007, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    11. Ageliki Anagnostou & Stephanos Papadamou, 2012. "The effects of Monetary Policy shocks across the Greek Regions," ERSA conference papers ersa12p507, European Regional Science Association.
    12. Eiblmeier, Sebastian, 2024. "Differential Effects of Unconventional Monetary Policy," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302432, Verein für Socialpolitik / German Economic Association.
    13. Zan Yang & Shuping Wu & Yanhao Shen, 2017. "Monetary Policy, House Prices, and Consumption in China: A National and Regional Study," International Real Estate Review, Global Social Science Institute, vol. 20(1), pages 23-49.
    14. Angeliki ANAGNOSTOU & Stephanos PAPADAMOU, 2014. "The Impact Of Monetary Shocks On Regional Output: Evidence From Four South Eurozone Countries," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 39, pages 105-130.
    15. Martin Sokol & Leonardo Pataccini, 2022. "Financialisation, regional economic development and the coronavirus crisis: a time for spatial monetary policy? [The financialization of home and the mortgage market crisis]," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 15(1), pages 75-92.
    16. Maurizio La Rocca & Tiziana La Rocca & Alfio Cariola, 2011. "Capital Structure Decisions During a Firm's Life Cycle," Small Business Economics, Springer, vol. 37(1), pages 107-130, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. I. Arnold & C.J.M. Kool & K. Raabe, 2005. "New evidence on the firm size effects in US monetary policy transmission," Working Papers 05-11, Utrecht School of Economics.
    2. Ivo J. M. Arnold & Evert B. Vrugt, 2004. "Firm Size, Industry Mix and the Regional Transmission of Monetary Policy in Germany," German Economic Review, Verein für Socialpolitik, vol. 5(1), pages 35-59, February.
    3. K. Raabe & I. Arnold & C.J.M. Kool, 2006. "Firm Size and Monetary Policy Transmission: A Theoretical Model on the Role of Capital Investment Expenditures," Working Papers 06-14, Utrecht School of Economics.
    4. repec:ers:journl:v:volumexxi:y:2018:i:issue4:p:31-39 is not listed on IDEAS
    5. Joaquin L. Vespignani, 2013. "The Industrial Impact of Monetary Shocks During the Inflation‐Targeting Era in Australia," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 53(1), pages 47-71, March.
    6. Nandini Sengupta, 2014. "Sectoral Effects of Monetary Policy in India," South Asian Journal of Macroeconomics and Public Finance, , vol. 3(1), pages 127-154, June.
    7. Don Bredin & Stuart Hyde & Dirk Nitzsche & Gerard O'Reilly, 2009. "European monetary policy surprises: the aggregate and sectoral stock market response," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 14(2), pages 156-171.
    8. Gábor Pellényi, 2012. "The Sectoral Effects of Monetary Policy in Hungary: A Structural Factor Analysis," MNB Working Papers 2012/1, Magyar Nemzeti Bank (Central Bank of Hungary).
    9. Kilinc, Mustafa & Tunc, Cengiz, 2019. "The asymmetric effects of monetary policy on economic activity in Turkey," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 505-528.
    10. Charaf-Eddine Moussir, 2017. "Effets sectoriels de la politique monétaire et activité économique: cas du Maroc," Post-Print hal-01449490, HAL.
    11. Hulsewig, Oliver & Mayer, Eric & Wollmershauser, Timo, 2006. "Bank loan supply and monetary policy transmission in Germany: An assessment based on matching impulse responses," Journal of Banking & Finance, Elsevier, vol. 30(10), pages 2893-2910, October.
    12. Gregor Bäurle & Elizabeth Steiner & Gabriel Züllig, 2021. "Forecasting the production side of GDP," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 40(3), pages 458-480, April.
    13. Clausen, Volker & Wohltmann, Hans-Werner, 2005. "Monetary and fiscal policy dynamics in an asymmetric monetary union," Journal of International Money and Finance, Elsevier, vol. 24(1), pages 139-167, February.
    14. repec:rdg:wpaper:em-dp2007-47 is not listed on IDEAS
    15. Ikechukwu Kelikume, 2014. "Interest Rate Chanel of Monetary Transmission Mechanism: Evidence from Nigeria," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 8(4), pages 97-107.
    16. Hein, Eckhard & Truger, Achim, 2002. "European Monetary Union: Nominal convergence, real divergence and slow growth? An investigation into the effects of changing macroeconomic policy institutions associated with monetary union," WSI Working Papers 107, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.
    17. Holtemöller, Oliver, 2002. "Further VAR evidence for the effectiveness of a credit channel in Germany," SFB 373 Discussion Papers 2002,66, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    18. Zeyyad Mandalinci, 2015. "Effects of Monetary Policy Shocks on UK Regional Activity: A Constrained MFVAR Approach," Working Papers 758, Queen Mary University of London, School of Economics and Finance.
    19. Dennis W. Jansen & Ruby P. Kishan & Diego E. Vacaflores, 2013. "Sectoral Effects of Monetary Policy: The Evidence from Publicly Traded Firms," Southern Economic Journal, John Wiley & Sons, vol. 79(4), pages 946-970, April.
    20. Dedola, Luca & Lippi, Francesco, 2005. "The monetary transmission mechanism: Evidence from the industries of five OECD countries," European Economic Review, Elsevier, vol. 49(6), pages 1543-1569, August.
    21. Saibal Ghosh, 2009. "Industry Effects of Monetary Policy: Evidence from India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 44(1), pages 89-105, July.
    22. Mansor H. Ibrahim, 2005. "Sectoral Effects of Monetary Policy: Evidence from Malaysia," Asian Economic Journal, East Asian Economic Association, vol. 19(1), pages 83-102, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:regstd:v:41:y:2007:i:6:p:797-808. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CRES20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.