01803cas a2200253 a 4500 AALejournalIMF001750 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451858877 1018-5941 BD-DhAAL BD-DhAAL Choi, Woon. Monetary Policy and Corporate Liquid Asset Demand / Woon Choi, Yungsan Kim. Washington, D.C. : International Monetary Fund, 2001. 1 online resource (41 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students In contrast to conventional money demand literature, this paper proposes that monetary policy affects corporate liquidity demand directly through a separate channel-what we call "the loan commitment channel." Upon persistent monetary policy shocks, firms make substitutions between sources of funds for intertemporal liquidity management, taking advantage of loan commitments and sluggish movements in loan rates. To test this proposition, we estimate corporate liquidity demand, controlling for firm characteristics, using U.S. quarterly panel data. The results indicate that when monetary policy is tightened, S and P 500 firms initially increase their liquid assets before reducing them, whereas non-S and P firms reduce them more quickly. Mode of access: Internet Kim, Yungsan. IMF Working Papers; Working Paper ; No. 2001/177 Full text available on IMF http://elibrary.imf.org/view/journals/001/2001/177/001.2001.issue-177-en.xml IMF e-Library