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The Cost Channel of Monetary Transmission / Marvin J. Barth III, Valerie A. Ramey.
- Format:
- Book
- Author/Creator:
- Barth, Marvin J, III.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w7675.
- NBER working paper series no. w7675
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2000.
- Summary:
- This paper presents evidence that the cost channel' may be an important part of the monetary transmission mechanism. We argue that if working capital is an essential component of production and distribution, monetary contractions can affect output through a supply channel as well as the traditional demand-type channels. We specify an industry equilibrium model and use it to interpret the results of a VAR analysis. We find that following a monetary contraction, many industries exhibit periods of falling output and rising price-wage ratios, consistent with a supply shock in our model. We also show that the effects are noticeably more pronounced during the period before 1979.
- Notes:
- Print version record
- April 2000.
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