Employment and the Collateral Channel of Monetary Policy

Research Seminars: Mannheim Applied Seminar

The paper presented in this ZEW Research Seminar uses detailed firm-level data to show that monetary policy affects employment through housing collateral and corporate debt. The research design exploits the fact that many small and medium-sized enterprises use their directors’ homes as a key source of collateral for corporate loans, but directors typically live in a different region to their firm. This spatial separation of firms from their collateral allows us to distinguish the collateral channel from local demand effects. The authors find that younger and more levered firms with higher exposure to housing collateral fluctuations adjust employment the most following a change in monetary policy. The collateral channel explains a sizeable share of the aggregate employment response.

Venue

ZEW – Leibniz-Zentrum für Europäische Wirtschaftsforschung

People

Contact

Head and Dean of Graduate Studies
Sebastian Siegloch
To the profile

Directions

Address

ZEW – Leibniz-Zentrum für Europäische Wirtschaftsforschung

maps

Click the button below to reload the content. (I agree to external content being displayed to me. Read more in our privacy policy).

L 7, 1, 68161 Mannheim
  • Room Straßburg