02624cas a2200337 a 4500 AALejournalIMF022401 230101c9999 xx r poo 0 0eng d 5.00 USD 9798400201028 1018-5941 BD-DhAAL BD-DhAAL Choi, Sangyup. Revisiting the Monetary Transmission Mechanism Through an Industry-Level Differential Approach / Sangyup Choi, Tim Willems, Seung Yong Yoo. Washington, D.C. : International Monetary Fund, 2022. 1 online resource (67 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 By combining industry-level data on output and prices with monetary policy rates for a panel of 88 countries, this paper analyzes how the effects of monetary policy vary with certain industry characteristics. Next to being interesting in their own right, our results are informative on the importance of various transmission mechanisms (as they are expected to vary systematically with the included characteristics). Rather than relying on standard monetary policy shock identification, we overcome the endogeneity problem by taking a differential approach (interacting our monetary policy measure with industry-level characteristics). Our results suggest that monetary contractions reduce output by more in industries featuring assets that are more difficult to collateralize (as predicted by the balance sheet channel) and in industries more reliant on international trade (as predicted by the exchange rate channel). Consistent with the financial accelerator mechanism, we find that the balance sheet channel becomes stronger during bad times. At the same time, we do not find evidence supporting the traditional interest rate channel of monetary policy; the same goes for the cost channel. Mode of access: Internet Business Fluctuations imf Cycles imf Economic Growth of Open Economies imf Financial Institutions and Services imf Monetary Policy Transmission imf Monetary Policy imf Willems, Tim. Yong Yoo, Seung. IMF Working Papers; Working Paper ; No. 2022/017 Full text available on IMF http://elibrary.imf.org/view/journals/001/2022/017/001.2022.issue-017-en.xml IMF e-Library