How do large #cash holdings affect monetary transmission? One of the topics of the speech of @Isabel_Schnabel at the inaugural conference of the Research Network Challenges for Monetary Policy Transmission in a Changing World (ChaMP), ecb.europa.eu/press/key/date…
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In "The effect of firm cash holdings on monetary policy," we show that large cash holdings strengthens monetary policy shocks. The real interest rate stays higher for longer sciencedirect.com/science/articl… #MonetaryPolicy
Another topic of the speech is the need to understand how the economy reacts under different conditions. For example, firms increase the frequency of price changes when #inflation is higher. The frequency of price changes is now lower with lower inflation