Unlocking efficiency: optimal monetary policy when capital misallocation matters

While “misallocation of capital” and its detrimental impact on productivity is traditionally beyond the scope of central banks, monetary policy can influence it through firms’ investment decisions.

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Provider: 
ECBECB
URL: 
https://www.ecb.europa.eu//press/research-publications/resbull/2024/html/ecb.rb240418~214eff9f3f.en.htmlhttps://www.ecb.europa.eu//press/research-publications/resbull/2024/html/ecb.rb240418~214eff9f3f.en.html
Retrieved on: 
금요일, 4월 19, 2024
Information
Tags: 
Commitment, Statistics, European Central Bank, Central bank, Face, Science, Grimm, ECB, Benigno, Journal, Policy, American Economic Journal, TFP, International Monetary Fund, American Economic Association, Business cycle, Fornaro, Interest, Princeton University Press, Directorate, American Economic Review, Literature, New Keynesian economics, Timeless, NBER
Geotags: 
WOODFORD
요약
Key Points: 
  • While “misallocation of capital” and its detrimental impact on productivity is traditionally beyond the scope of central banks, monetary policy can influence it through firms’ investment decisions.
  • Using a New Keynesian model and granular data on Spanish firms, our results show that expansionary monetary policy reduces capital misallocation.
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