Monetary Policy and Intangible Investment
77 Pages Posted: 9 Jun 2020 Last revised: 7 Nov 2022
Date Written: July 8, 2022
The investment and stock prices of firms with relatively more intangible assets respond less to monetary policy. Similarly, intangible investment responds less to monetary policy compared to tangible investment. These effects are most pronounced among financially constrained firms, indicating that corporate intangible capital weakens the credit channel of monetary policy transmission. The evidence that higher depreciation rates or higher adjustment costs of intangible assets explain these effects is mixed, suggesting a smaller role for these channels.
Keywords: Intangible Investment, Monetary Policy, Credit Channel, Stock Returns, Heterogeneity
JEL Classification: E22, E52, G31, G32
Suggested Citation: Suggested Citation