Monetary Policy, Labor Income Redistribution and the Credit Channel: Evidence from Matched Employer-Employee and Credit Registers

Monetary Policy, Macroprudential Policy and Financial Stability

“…The GFC also renewed interest in the relationship between bank risk taking and monetary policy e.g., Allen and Rogoff, 2011;Adrian and Shin, 2010;Dell'Ariccia et al, 2017;Diamond and Rajan, 2011;Di Maggio and Kacperczyk, 2017;Jimenez et al, 2014;Maddaloni and Peydro, 2011). With the implementation of new (unconventional) monetary policy instruments a growing number of papers analyse the implications of these policies for risk taking in financial markets (e.g., Chodorow-Reich, 2014;Koijen et al, 2021;Krishnamurthy and Vissing-Jorgensen, 2011;Krishnamurthy et al, 2017) andbank lending (e.g., Chakraborty et al, 2018;Di Maggio et al, 2020;Rodnyansky and Darmouni, 2017;Peydro et al, 2021).…”

Monetary Policy Under Labor Market Power

“…Several early papers have established a strong response of unemployment to monetary policy shocks, such as Romer and Romer (1989). More recent papers focused on the mechanisms by which monetary policy transmits into labor markets, and their implications for inequality (Fornaro and Wolf, 2021;Coglianese et al, 2021;Dolado et al, 2021;Coibion et al, 2017;Andersen et al, 2021;Jasova et al, 2021;Bartscher et al, 2021;Bergman et al, 2022). For instance, Jasova et al (2021) find that firms that are less financially constrained tend to respond more to monetary policy shocks both in terms of their investment and hiring.…”