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The Monetary Transmission Mechanism: Evidence from the Industry Data of Five OECD Countries

Author

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  • Luca Dedola

    (Banca d'Italia)

  • Francesco Lippi

    (Banca d'Italia)

Abstract

This paper collects new evidence on the monetary transmission mechanism. This evidence is obtained from the study of the effects that unexpected monetary policy shocks exert on the activity of the manufacturing sectors in 5 OECD countries (France, Germany, Italy, UK and USA). The goal is twofold. First, to document the cross-industry heterogeneity of monetary policy effects. Second, to explain this heterogeneity in terms of some industry characteristics which are suggested by theory. The results highlight a wide variation of the policy effects across industries. It is shown that these differences can be partly explained by industrial features pointed to both by the interest rate channel (e.g. the durability of the output produced in each industry) and by the credit channel (e.g. the borrowing capacity of firms').

Suggested Citation

  • Luca Dedola & Francesco Lippi, 2000. "The Monetary Transmission Mechanism: Evidence from the Industry Data of Five OECD Countries," Econometric Society World Congress 2000 Contributed Papers 1833, Econometric Society.
    • Handle: RePEc:ecm:wc2000:1833
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    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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