In this paper, we use cross-industry, cross-country panel data to test if, and how monetary policy
can affect growth. To do so, we use two alternative approaches. We first focus on the reactivity of real short term interest rates to the business cycle and show that its interaction with industry-level measures of financial constraints correlates positively and significantly with industry-growth. Yet, this effect holds only in countries with a relatively low index for product market regulation. When product markets are severely regulated, the cyclical pattern of real short term interest rates has no impact on industry growth. Second, we compute the unexpected drop in long-term government bond yields of Euro Area countries that followed the ECB\u00eds announcement of Outright Monetary Transactions (OMT) and show that it raised growth disproportionately more in highly indebted sectors. Moreover, this effect holds only in countries where the product market regulation index is rather low. Otherwise, the drop in government bond yields had either no effect or benefited to less indebted sectors.<\/p>","protected":false},"excerpt":{"rendered":"
In this paper, we use cross-industry, cross-country panel data to test if, and how monetary policycan affect growth. To do so, we use two alternative approaches. We first focus on the reactivity of real short term interest rates to the business cycle and show that its interaction with industry-level measures of financial constraints correlates positively […]<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":true},"thematique":[49],"type-de-publication":[],"class_list":["post-581","publication","type-publication","status-publish","hentry","thematique-growth"],"acf":[],"yoast_head":"\n