Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229087
Authors: 
Henkel, Lukas
Year of Publication: 
2020
Series/Report no.: 
ECB Working Paper No. 2473
Abstract: 
This paper studies the role of sticky prices for the monetary transmission mechanism, using disaggregated industry-level data from 205 US industries. There is substantial heterogeneity in the output responses of industries to monetary policy surprises. I show that an industry's response to monetary policy surprises is systematically related to an industry's degree of price stickiness as measured by the average frequency of price adjustment. The size of the differential reaction is economically large and statistically significant. The results suggest that sticky prices play an important role in the transmission of monetary policy, consistent with New Keynesian macroeconomic models. This result is robust to the inclusion of further industry-level control variables.
Subjects: 
sticky prices
monetary transmission mechanism
JEL: 
E31
E32
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-4390-1
Document Type: 
Working Paper

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