Free Essays on Euro-monetary Transition

The Eurosystem Monetary Transmission Network This issue of the ECB Working Paper Series contains research presented at a conference on â€Å"Monetary Policy Transmission in the Euro Area† held at the European Central Bank on 18 and 19 December 2001. This research was conducted within the Monetary Transmission Network, a group of economists affiliated with the ECB and the National Central Banks of the Eurosystem chaired by Ignazio Angeloni. Anil Kashyap (University of Chicago) acted as external consultant and Benoà ®t Mojon as secretary to the Network. The papers presented at the conference examine the euro area monetary transmission process using different data and methodologies: structural and VAR macro-models for the euro area and the national economies, panel micro data analyses of the investment behaviour of non-financial firms and panel micro data analyses of the behaviour of commercial banks. Contents Abstract 4 Non-technical summary 5 1. Introduction 7 II. A Brief account of some Luxembourg peculiarities 9 III. Theoretical aspects 11 IV. Data, variables and estimation methodology 12 V. Empirical results 21 VI. Concluding remarks 26 VII. References 27 VIII. Appendix 29 European Central Bank Working Paper Series 31 Abstract: This paper investigates the transmission of monetary policy using data from a panel of Luxembourg firms. The results indicate that the sales accelerator may be at work. A very robust result is the negative effect of the user cost of capital on firms’ investment ratio. Changes in user costs are significantly affected by changes in the monetary policy indicator. In addition, firm specific balance sheet characteristics, such as the lagged cash stock to capital ratio influence the investment behaviour according to the broad credit channel theory. Using various sample splits, it is shown that young firms, in particular, are more sensitive to user cost changes, sales growth and ... Free Essays on Euro-monetary Transition Free Essays on Euro-monetary Transition The Eurosystem Monetary Transmission Network This issue of the ECB Working Paper Series contains research presented at a conference on â€Å"Monetary Policy Transmission in the Euro Area† held at the European Central Bank on 18 and 19 December 2001. This research was conducted within the Monetary Transmission Network, a group of economists affiliated with the ECB and the National Central Banks of the Eurosystem chaired by Ignazio Angeloni. Anil Kashyap (University of Chicago) acted as external consultant and Benoà ®t Mojon as secretary to the Network. The papers presented at the conference examine the euro area monetary transmission process using different data and methodologies: structural and VAR macro-models for the euro area and the national economies, panel micro data analyses of the investment behaviour of non-financial firms and panel micro data analyses of the behaviour of commercial banks. Contents Abstract 4 Non-technical summary 5 1. Introduction 7 II. A Brief account of some Luxembourg peculiarities 9 III. Theoretical aspects 11 IV. Data, variables and estimation methodology 12 V. Empirical results 21 VI. Concluding remarks 26 VII. References 27 VIII. Appendix 29 European Central Bank Working Paper Series 31 Abstract: This paper investigates the transmission of monetary policy using data from a panel of Luxembourg firms. The results indicate that the sales accelerator may be at work. A very robust result is the negative effect of the user cost of capital on firms’ investment ratio. Changes in user costs are significantly affected by changes in the monetary policy indicator. In addition, firm specific balance sheet characteristics, such as the lagged cash stock to capital ratio influence the investment behaviour according to the broad credit channel theory. Using various sample splits, it is shown that young firms, in particular, are more sensitive to user cost changes, sales growth and ...