Technological progress reduces the effectiveness of monetary policy

Press/Media: Public engagement activitiesAcademic

Period19 Mar 2021

Media contributions

1

Media contributions

  • TitleTechnological progress reduces the effectiveness of monetary policy
    Degree of recognitionInternational
    Media name/outletVoxEU
    Media typeWeb
    Date19/03/21
    DescriptionTechnological progress increases the importance of corporate intangible assets such as research and development knowledge, organisational structure, and brand equity. Using US data covering 1990 to 2017, this column shows that the stock prices and investment of firms with more intangible assets respond less to monetary policy shocks. Similarly, intangible investment responds less to monetary policy compared to tangible investment. The key channel explaining these effects is a weaker credit channel of monetary policy, as firms with intangible assets use less debt.
    Producer/AuthorCEPR
    URLhttps://cepr.org/voxeu/columns/technological-progress-reduces-effectiveness-monetary-policy
    PersonsRobin Dottling