Monetary Policy and Firm-Level Uncertainty

16 Pages Posted: 30 Jan 2022

See all articles by Aeimit Lakdawala

Aeimit Lakdawala

Wake Forest University - Department of Economics

Timothy Moreland

University of North Carolina (UNC) at Greensboro - Department of Economics

Date Written: January 14, 2022

Abstract


Uncertainty at the firm-level falls on FOMC announcement days with substantial variation both across firms and over time. We find that this movement is not related to surprises about the expected path of the policy rate but rather to forward guidance driven changes in uncertainty around the expected path. The effect of this monetary policy uncertainty is attenuated for firms that have higher growth opportunities (as measured by Tobin's Q).

Keywords: Monetary policy transmission, firm level uncertainty

JEL Classification: E52, E44, E43, E58

Suggested Citation

Lakdawala, Aeimit and Moreland, Timothy, Monetary Policy and Firm-Level Uncertainty (January 14, 2022). Available at SSRN: https://ssrn.com/abstract=4017967 or http://dx.doi.org/10.2139/ssrn.4017967

Aeimit Lakdawala (Contact Author)

Wake Forest University - Department of Economics ( email )

Winston Salem, NC
United States

HOME PAGE: http://aeimit.weebly.com

Timothy Moreland

University of North Carolina (UNC) at Greensboro - Department of Economics ( email )

Greensboro, NC 27402-6165
United States

HOME PAGE: http://timothymoreland.com

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