The cost channel of monetary policy transmission : evidence from the Euro Area
Professor Advisor
dc.contributor.advisor
Gregorio, José de
Professor Advisor
dc.contributor.advisor
Hoogduin, L. H
Professor Advisor
dc.contributor.advisor
Berk., J:M.
Author
dc.contributor.author
Spahiu, Laura
Associate professor
dc.contributor.other
Hoogduin, L.H.
Associate professor
dc.contributor.other
Berk, J.M.
Admission date
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2020-06-23T21:08:38Z
Available date
dc.date.available
2020-06-23T21:08:38Z
Publication date
dc.date.issued
2018-12
Identifier
dc.identifier.uri
https://repositorio.uchile.cl/handle/2250/175653
General note
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Tesis para optar al grado de Magíster en Análisis Económico en cotutela con la Universidad de Groningen
Abstract
dc.description.abstract
This paper studies the validity of the cost channel of monetary policy transmission in the euro
area. The idea behind the aforementioned channel is that an increase in short-term interest
rates, and in turn lending rates, puts upward pressure on inflation. The reason is that firms
borrow funds in order to pay for their factors of production. An increase in interest rates
increases the cost of labor and in turn firms will increase their prices to recoup the costs. In
order to test this effect an interest rate augmented Phillips curve was jointly estimated with a
Taylor rule. This study found no empirical evidence in favor of the cost channel with the
potential reasons being small sample bias or misspecification in modelling monetary policy
by using the Taylor rule.