Monetary Policy and Local Industry Structure

Alexander A. Popov, Lea Steininger

Publikation: Working/Discussion PaperWU Working Paper

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Abstract

We study how monetary policy affects local market competition in a union of countries experiencing different economic conditions: the euro area. We find that when monetary conditions tighten (loosen), from the point of view of an individual economy, market concentration increases (declines). This effect is more pronounced when interest rates have been low-for-long, and it is stronger in sectors that are relatively more sensitive to changes in financing conditions. The underlying mechanism is a decline (increase) in short-term debt and investment by smaller and medium-size firms, relative to large firms, following monetary policy tightening (easing).
OriginalspracheEnglisch
HerausgeberWU Vienna University of Economics and Business
DOIs
PublikationsstatusVeröffentlicht - Feb. 2023

Publikationsreihe

ReiheDepartment of Economics Working Paper Series
Nummer333

WU Working Paper Reihe

  • Department of Economics Working Paper Series

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