01925cas a2200253 a 4500 AALejournalIMF021144 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513552521 1018-5941 BD-DhAAL BD-DhAAL Dottling, Robin. Monetary Policy and Intangible Investment / Robin Dottling, Lev Ratnovski. Washington, D.C. : International Monetary Fund, 2020. 1 online resource (53 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 We contrast how monetary policy affects intangible relative to tangible investment. We document that the stock prices of firms with more intangible assets react less to monetary policy shocks, as identified from Fed Funds futures movements around FOMC announcements. Consistent with the stock price results, instrumental variable local projections confirm that the total investment in firms with more intangible assets responds less to monetary policy, and that intangible investment responds less to monetary policy compared to tangible investment. We identify two mechanisms behind these results. First, firms with intangible assets use less collateral, and therefore respond less to the credit channel of monetary policy. Second, intangible assets have higher depreciation rates, so interest rate changes affect their user cost of capital relatively less. Mode of access: Internet Ratnovski, Lev. IMF Working Papers; Working Paper ; No. 2020/160 Full text available on IMF http://elibrary.imf.org/view/journals/001/2020/160/001.2020.issue-160-en.xml IMF e-Library