Trade Credit and the Transmission of Unconventional Monetary Policy
Abstract/Contents
- Abstract
- We show that production networks are important for the transmission of unconventional monetary policy. Firms with bonds eligible for purchase under the European Central Bank’s Corporate Sector Purchase Program act as financial intermediaries by extending more trade credit to their customers. The increase in trade credit is more pronounced from core countries to periphery countries and for financially constrained customers. Customers increase investment and employment in response to the increase in trade financing, while suppliers expand their customer base, contributing to upstream industry concentration. Our findings suggest that trade credit redistributes the effects of monetary policy across regions and firms.
Description
| Type of resource | text |
|---|---|
| Date created | August 23, 2021 |
Creators/Contributors
| Author | Adelino, Manuel |
|---|---|
| Author | Ferreira, Miguel A. |
| Author | Giannetti, Mariassunta |
| Author | Pires, Pedro |
| Organizer of meeting | Matvos, Gregor |
| Organizer of meeting | Seru, Amit |
Subjects
| Subject | monetary policy |
|---|---|
| Subject | trade credit |
| Subject | corporate bonds |
| Subject | investment |
| Subject | employment |
| Genre | Text |
| Genre | Working paper |
| Genre | Grey literature |
Bibliographic information
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- License
- This work is licensed under a Creative Commons Attribution 4.0 International license (CC BY).
Preferred citation
- Preferred citation
- Adelino, M., Ferreira, M., Giannetti, M., and Pires, P. (2022). Trade Credit and the Transmission of Unconventional Monetary Policy. Stanford Digital Repository. Available at https://purl.stanford.edu/yg891hx9284
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SITE Conference 2021
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