The effect of firm cash holding on monetary policy

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• dc.contributor.author Adão, Bernardinoca
• dc.contributor.author Silva, André C.ca
• dc.date.accessioned 2016-07-11T10:21:53Z
• dc.date.available 2016-07-11T10:21:53Z
• dc.date.issued 2015-12
• dc.description.abstract Firm cash holdings increased substantially from 1980 to 2013. The overall distribution of firm cash holdings changed in the same period. We study the implications of these changes for monetary policy. We use Compustat data and a model with financial frictions that allows the calculation of the monetary policy effects according to the distribution of cash holdings. We find that the interest rate channel of the transmission of monetary policy has become more powerful, as the impact of monetary policy over real interest rates increased. With the observed changes in firm cash holdings, the real interest rate takes 3.4 months more to return to its initial value after a shock to/nthe nominal interest rate.ca
• dc.description.sponsorship The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.
• dc.format.mimetype application/pdfca
• dc.identifier.uri http://hdl.handle.net/10230/27022
• dc.language.iso engca
• dc.relation.ispartofseries Ademu Working Papers Series; 11
• dc.relation.projectID info:eu-repo/grantAgreement/EC/H2020/649396
• dc.rights This is an Open Access article distributed under the terms of the Creative Commons Attribution License Creative Commons Attribution 4.0 International, which permits unrestricted use, distribution and reproduction in any medium provided that the original work is properlyattributed.ca
• dc.rights This is an Open Access article distributed under the terms of the Creative Commons Attribution License Creative Commons Attribution 4.0 International, which permits unrestricted use, distribution and reproduction in any medium provided that the original work is properlyattributed.
• dc.rights.accessRights info:eu-repo/semantics/openAccessca
• dc.rights.uri https://creativecommons.org/licenses/by/4.0/
• dc.subject.keyword Firm cash holdings
• dc.subject.keyword Interest rates
• dc.subject.keyword Financial frictions
• dc.subject.keyword Market segmentation
• dc.subject.keyword Liquidity effect
• dc.subject.keyword Monetary policy
• dc.title The effect of firm cash holding on monetary policyca
• dc.type info:eu-repo/semantics/workingPaperca