Bahaj, Saleem;
Foulis, Angus;
Pinter, Gabor;
Surico, Paolo;
(2022)
Employment and the Residential Collateral Channel of Monetary Policy.
Journal of Monetary Economics
10.1016/j.jmoneco.2022.07.002.
(In press).
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Abstract
Using micro-data covering private and public UK firms, we document heterogeneous responses to monetary policy; finding that employment at younger, more-levered firms is most sensitive. This heterogeneity is consistent with firm-level financial constraints. To show this, we exploit the fact that the homes of company directors are a key source of corporate collateral, but many directors live in a different region to their firm, allowing specifications controlling for demand. Younger, more-levered firms exposed to collateral fluctuations drive the employment response, showing a residential collateral channel in the transmission of monetary policy to firms. JEL Codes: D22, E52, R30
| Type: | Article |
|---|---|
| Title: | Employment and the Residential Collateral Channel of Monetary Policy |
| DOI: | 10.1016/j.jmoneco.2022.07.002 |
| Publisher version: | https://doi.org/10.1016/j.jmoneco.2022.07.002 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| Keywords: | Firm heterogeneity, Financial Constraints, SME Financing, Monetary Policy Transmission |
| UCL classification: | UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > UCL School of Management UCL > Provost and Vice Provost Offices > UCL BEAMS UCL |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10152008 |
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