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Firm Size and Monetary Policy Transmission – Evidence from German Business Survey Data

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  • Michael Ehrmann
Abstract
Using business survey data on German manufacturing firms, this paper provides tests for hypotheses formulated in capital market imperfection theories that predict distributional effects in the transmission of monetary policy. The business conditions of small firms are found to be somewhat more sensitive to monetary policy shocks than those of large firms, also when accounting for demand differences. These effects are reinforced in business cycle downturns.

Suggested Citation

  • Michael Ehrmann, 2004. "Firm Size and Monetary Policy Transmission – Evidence from German Business Survey Data," CESifo Working Paper Series 1201, CESifo.
    • Handle: RePEc:ces:ceswps:_1201
    as

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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp1201.pdf
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    References listed on IDEAS

    as
    1. Gabriel Perez‐Quiros & Allan Timmermann, 2000. "Firm Size and Cyclical Variations in Stock Returns," Journal of Finance, American Finance Association, vol. 55(3), pages 1229-1262, June.
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    8. Nikolaus A. Siegfried, 2000. "Microeconometric Evidence for a German Credit Channel," Quantitative Macroeconomics Working Papers 20002, Hamburg University, Department of Economics.
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    13. repec:oxf:wpaper:060 is not listed on IDEAS
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    More about this item

    Keywords

    monetary policy transmission; firm size; Markov switching;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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