Measuring regional effects of monetary policy in Canada
This article measures monetary policy shocks and examines whether the effects of such shocks have differential regional effects in Canada. We identify three possible sources of regional effects: differences in the importance of interest-sensitive industries, differences in the contribution of export...
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Online Access: | http://www.tandfonline.com/doi/abs/10.1080/00036840701604362 |
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ftrepec:oai:RePEc:taf:applec:v:41:y:2009:i:16:p:2093-2113 2023-05-15T17:22:15+02:00 Measuring regional effects of monetary policy in Canada George Georgopoulos http://www.tandfonline.com/doi/abs/10.1080/00036840701604362 unknown http://www.tandfonline.com/doi/abs/10.1080/00036840701604362 article ftrepec 2020-12-04T13:36:15Z This article measures monetary policy shocks and examines whether the effects of such shocks have differential regional effects in Canada. We identify three possible sources of regional effects: differences in the importance of interest-sensitive industries, differences in the contribution of exports to output and differences in the proportion of small relative to large firms. Using the overnight interest rate as the instrument of monetary policy, we present impulse responses of industry output from a recursive vector autoregression, which incorporates a cointegrating relation. The results show that manufacturing and primary industries are the most interest sensitive. We conduct impulse responses of provincial employment from a monetary contraction. The results show that Newfoundland and Prince Edward Island (PEI), primary industry-based provinces, are strongly and adversely affected by a monetary contraction. Manitoba, Saskatchewan and Alberta, also primary-based, are also affected. Ontario, which is manufacturing-based, is also affected but to a lesser extent. The response of Quebec, New Brunswick, Nova Scotia and British Columbia are not statistically significant. Article in Journal/Newspaper Newfoundland Prince Edward Island RePEc (Research Papers in Economics) British Columbia ENVELOPE(-125.003,-125.003,54.000,54.000) Canada |
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RePEc (Research Papers in Economics) |
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description |
This article measures monetary policy shocks and examines whether the effects of such shocks have differential regional effects in Canada. We identify three possible sources of regional effects: differences in the importance of interest-sensitive industries, differences in the contribution of exports to output and differences in the proportion of small relative to large firms. Using the overnight interest rate as the instrument of monetary policy, we present impulse responses of industry output from a recursive vector autoregression, which incorporates a cointegrating relation. The results show that manufacturing and primary industries are the most interest sensitive. We conduct impulse responses of provincial employment from a monetary contraction. The results show that Newfoundland and Prince Edward Island (PEI), primary industry-based provinces, are strongly and adversely affected by a monetary contraction. Manitoba, Saskatchewan and Alberta, also primary-based, are also affected. Ontario, which is manufacturing-based, is also affected but to a lesser extent. The response of Quebec, New Brunswick, Nova Scotia and British Columbia are not statistically significant. |
format |
Article in Journal/Newspaper |
author |
George Georgopoulos |
spellingShingle |
George Georgopoulos Measuring regional effects of monetary policy in Canada |
author_facet |
George Georgopoulos |
author_sort |
George Georgopoulos |
title |
Measuring regional effects of monetary policy in Canada |
title_short |
Measuring regional effects of monetary policy in Canada |
title_full |
Measuring regional effects of monetary policy in Canada |
title_fullStr |
Measuring regional effects of monetary policy in Canada |
title_full_unstemmed |
Measuring regional effects of monetary policy in Canada |
title_sort |
measuring regional effects of monetary policy in canada |
url |
http://www.tandfonline.com/doi/abs/10.1080/00036840701604362 |
long_lat |
ENVELOPE(-125.003,-125.003,54.000,54.000) |
geographic |
British Columbia Canada |
geographic_facet |
British Columbia Canada |
genre |
Newfoundland Prince Edward Island |
genre_facet |
Newfoundland Prince Edward Island |
op_relation |
http://www.tandfonline.com/doi/abs/10.1080/00036840701604362 |
_version_ |
1766108750282752000 |