Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/214980
Authors: 
Balleer, Almut
Zorn, Peter
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7978
Abstract: 
We estimate the effects of monetary policy on price-setting behavior in administrative micro data underlying the German producer price index. We find a strong degree of monetary non-neutrality. After expansionary monetary policy, the mass of additional price adjustments is economically small and the average absolute size across all price changes falls. The aggregate price level hardly adjusts, and monetary policy has real effects. These estimates rule out quantitative structural models that generate small and transient effects of monetary policy through selection on large price adjustments. We provide evidence that monetary policy propagates primarily through production units with weak financial positions.
Subjects: 
price setting
extensive margin
intensive margin
monetary policy
local projections
menu cost
credit constraints
JEL: 
E30
E31
E32
E44
E52
Document Type: 
Working Paper

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