Resumen

GRAUWE, Paul De  y  GERBA, Eddie. Monetary transmission under competing corporate finance regimes. Ens. polit. econ. [online]. 2017, vol.35, n.spe82, pp.78-100. ISSN 0120-4483.  https://doi.org/10.1016/j.espe.2016.11.002.

The behavioral agent-based framework of De Grauwe and Gerba (2015) is extended to allow for a counter-factual exercise on the role of corporate finance arrangements for monetary transmission. Two alternative firm financial frictions are independently introduced: market-based and bank-based. We find convincing evidence that the overall monetary transmission channel is stronger in the bank-based system compared to the market-based. While the growth in credit is larger in the market-based system, uncertainty originated from imperfect beliefs produce impulse responses in macroeconomic variables that are, on average, half of those in the bank-based model. At the same time we find mixed results on the conditional effectiveness of monetary policy to offset contractions. Conditional on being in a recession, a monetary expansion in a market-based system creates higher successive booms. That said, a monetary easing in the bank-based system is more effective in smoothening the financial-and business cycles.

JEL classification: E52, E44, E03, G21, G32.

Palabras clave : Monetary transmissions; Banks; Corporate finance; Business cycle.

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