Unconventional monetary policy, funding expectations and firm decisions

Arbeitspapier

We study the transmission of (unconventional) monetary policy to the real sector when firm decisions depend on both current and future credit market conditions. For a given level of current credit access, investment and employment increases more at firms expecting bank credit to improve in the future. Three separate unconventional policies by the ECB- the OMT, the introduction of negative rates, and the CSPP-improved expectations of future credit access for SMEs borrowing from banks that were expected to increase SME lending due to the policy. Our results enhance our understanding of the bank balance sheet channel of monetary policy.

Object Details

• ISBN: 978-92-899-4821-0
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 2598

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Empirical Analysis ; Expectations; Speculations ; Central Banks and Their Policies ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; National Debt; Debt Management; Sovereign Debt
• Subject: Unconventional monetary policy ; funding expectations ; corporate investment

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ferrando, Annalisa ; Popov, Alexander ; Udell, Gregory F.
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2021

Further information

• DOI: doi:10.2866/060095
• Handle: http://hdl.handle.net/10419/246175
• Last update: 10.03.2025, 11:44 AM CET