The effect of firm cash holdings on monetary policy

Detalhes bibliográficos
Autor(a) principal: Adão, Bernardino
Data de Publicação: 2020
Outros Autores: Silva, André C.
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10362/111092
Resumo: Firm cash holdings increased substantially from 1980 to 2017. We study the implications of the increase in firm cash holdings on monetary policy. We introduce a model that takes the distribution of firm cash holdings as an input. We find that the interest rate channel of the transmission of monetary policy becomes more powerful, as the impact of monetary policy over real interest rates increases. The time for the real interest rate to return to its initial value increases three times. Given the current large firm cash holdings, our results imply that monetary policy changes should be made gradually.
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spelling The effect of firm cash holdings on monetary policyFinancial frictionsFirm cash holdingsInterest ratesLiquidity effectMonetary policyFinanceEconomics and EconometricsFirm cash holdings increased substantially from 1980 to 2017. We study the implications of the increase in firm cash holdings on monetary policy. We introduce a model that takes the distribution of firm cash holdings as an input. We find that the interest rate channel of the transmission of monetary policy becomes more powerful, as the impact of monetary policy over real interest rates increases. The time for the real interest rate to return to its initial value increases three times. Given the current large firm cash holdings, our results imply that monetary policy changes should be made gradually.NOVA School of Business and Economics (NOVA SBE)RUNAdão, BernardinoSilva, André C.2022-07-05T00:31:07Z2020-092020-09-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10362/111092eng0014-2921PURE: 19002875https://doi.org/10.1016/j.euroecorev.2020.103508info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2024-03-11T04:54:51Zoai:run.unl.pt:10362/111092Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T03:41:46.988844Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv The effect of firm cash holdings on monetary policy
title The effect of firm cash holdings on monetary policy
spellingShingle The effect of firm cash holdings on monetary policy
Adão, Bernardino
Financial frictions
Firm cash holdings
Interest rates
Liquidity effect
Monetary policy
Finance
Economics and Econometrics
title_short The effect of firm cash holdings on monetary policy
title_full The effect of firm cash holdings on monetary policy
title_fullStr The effect of firm cash holdings on monetary policy
title_full_unstemmed The effect of firm cash holdings on monetary policy
title_sort The effect of firm cash holdings on monetary policy
author Adão, Bernardino
author_facet Adão, Bernardino
Silva, André C.
author_role author
author2 Silva, André C.
author2_role author
dc.contributor.none.fl_str_mv NOVA School of Business and Economics (NOVA SBE)
RUN
dc.contributor.author.fl_str_mv Adão, Bernardino
Silva, André C.
dc.subject.por.fl_str_mv Financial frictions
Firm cash holdings
Interest rates
Liquidity effect
Monetary policy
Finance
Economics and Econometrics
topic Financial frictions
Firm cash holdings
Interest rates
Liquidity effect
Monetary policy
Finance
Economics and Econometrics
description Firm cash holdings increased substantially from 1980 to 2017. We study the implications of the increase in firm cash holdings on monetary policy. We introduce a model that takes the distribution of firm cash holdings as an input. We find that the interest rate channel of the transmission of monetary policy becomes more powerful, as the impact of monetary policy over real interest rates increases. The time for the real interest rate to return to its initial value increases three times. Given the current large firm cash holdings, our results imply that monetary policy changes should be made gradually.
publishDate 2020
dc.date.none.fl_str_mv 2020-09
2020-09-01T00:00:00Z
2022-07-05T00:31:07Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10362/111092
url http://hdl.handle.net/10362/111092
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv 0014-2921
PURE: 19002875
https://doi.org/10.1016/j.euroecorev.2020.103508
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron:RCAAP
instname_str Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
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collection Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
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