Modelling Monetary Transmission in UK Manufacturing Industry Articles uri icon

authors

  • TENA HORRILLO, JUAN DE DIOS
  • TREMAYNE, ANDREW R.

publication date

  • September 2009

start page

  • 1053

end page

  • 1066

issue

  • 5

volume

  • 26

international standard serial number (ISSN)

  • 0264-9993

electronic international standard serial number (EISSN)

  • 1873-6122

abstract

  • This paper studies the transmission of monetary policy to industrial output in the UK. In order to capture asymmetries, a system of threshold equations is considered. However, unlike previous research, endogenous threshold parameters are allowed to be different for each equation. This approach is consistent with economic intuition and is shown to be of tangible importance after suitable econometric evaluation. Results show evidence of cross-sectional differences across industries and asymmetries in some sectors. These findings contribute to the debate about the importance of alternative economic theories to explain these asymmetries and support the use of a sectorally disaggregated approach to the analysis of monetary transmission.