Martin Blomhoff Holm, UIO. "The Transmission of Monetary Policy under the Microscope"
Department seminar. Martin Blomhoff Holm is an assistant professor at the University of Oslo. He will present the paper: "The Transmission of Monetary Policy under the Microscope". Coauthored by Pascal Paul and Andreas Tischbirek.
Martin Blomhoff Holm
We investigate the transmission of monetary policy to household consumption using detailed administrative data on the universe of households in Norway. Based on a novel series of identified monetary policy shocks, we estimate the dynamic responses of consumption, income, and saving along the liquid asset distribution of households. We find that low-liquidity but also high-liquidity households show strong responses, interest rate changes faced by borrowers and savers feed into consumption, and indirect effects of monetary policy outweigh direct effects, albeit with a delay. Overall, the results support the importance of financial frictions, cash-flow channels, and heterogeneous effects of monetary policy.