Regional Disparities in the Transmission of Monetary Policy

FRB of St. Louis Working Paper No. 2003-008

26 Pages Posted: 27 Jun 2003

See all articles by Howard J. Wall

Howard J. Wall

Lindenwood University - Center for Economics and the Environment

Michael Owyang

Federal Reserve Bank of St. Louis - Research Division

Date Written: April 29, 2003

Abstract

Using a monetary VAR, we show how the depths and lengths of recessions generated by contractionary monetary policy differ a great deal across U.S. regions. Our results indicate that the Great Lakes and the Far West experience the largest output losses during a monetary-policy-induced recession, while the losses are smallest in the Mideast, New England, and the Plains. Regions with large manufacturing shares tend to have deep, but brief, recessions, whereas regions with many small firms tend to have long recessions.

JEL Classification: E52, R12

Suggested Citation

Wall, Howard J. and Owyang, Michael T., Regional Disparities in the Transmission of Monetary Policy (April 29, 2003). FRB of St. Louis Working Paper No. 2003-008, Available at SSRN: https://ssrn.com/abstract=407704 or http://dx.doi.org/10.2139/ssrn.407704

Howard J. Wall (Contact Author)

Lindenwood University - Center for Economics and the Environment ( email )

209 S. Kingshighway
St. Charles, MO 63301
United States

Michael T. Owyang

Federal Reserve Bank of St. Louis - Research Division ( email )

411 Locust St
Saint Louis, MO 63011
United States

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