Article ID Journal Published Year Pages File Type
5067317 European Economic Review 2008 27 Pages PDF
Abstract
This paper studies the effect of market structure and macroeconomic uncertainty on the transmission of monetary policy. We motivate our analysis with a simple model which predicts that: (1) investment and production in more concentrated sectors are more affected by demand shocks and (2) high uncertainty makes investment and production more sensitive to demand shocks. The empirical analysis estimates the effect of monetary shocks on sectoral output for different sectors in the US using a structural vector autoregressive (VAR) approach. The results are generally consistent with the theoretical predictions.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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