{
  "title": "Monetary Policy and Corporate Liquid Asset Demand",
  "publication": "IMF Working Papers, November 1, 2001",
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  "summary": "In contrast to conventional money demand literature, this paper proposes that monetary policy affects corporate liquidity demand directly through a separate channel-what we call \"the loan commitment channel.",
  "sections": [
    {
      "heading": "Research question and hypothesis",
      "content": "- Proposes that monetary policy affects corporate liquidity demand directly through a separate channel called \"the loan commitment channel.\"\n- Hypothesis: Upon persistent monetary policy shocks, firms substitute between sources of funds for intertemporal liquidity management, taking advantage of loan commitments and sluggish movements in loan rates."
    },
    {
      "heading": "Methodology",
      "content": "- Empirical estimation of corporate liquidity demand using U.S. quarterly panel data.\n- Controls for firm characteristics.\n- Compares responses between S&P 500 firms and non-S&P firms."
    },
    {
      "heading": "Key findings",
      "content": "- When monetary policy is tightened:\n  - S&P 500 firms initially increase their liquid assets before reducing them.\n  - Non-S&P firms reduce their liquid assets more quickly.\n- The results support the existence of a loan commitment channel through which monetary policy directly affects corporate liquidity demand."
    },
    {
      "heading": "Subject coverage and keywords",
      "content": "- Subjects: Asset and liability management, Bank credit, Currencies, Demand for money, Financial institutions, Liquidity, Loans, Money\n- Keywords (as provided): assets ratio rise, Bank credit, cash reserves, commitment channel, Currencies, Demand for money, liquid asset demand, liquid asset holding, Liquidity, loan commitments, loan rate, Loans, market rate, monetary policy, opportunity cost, panel data, rate of return, WP\n\n---\n\n Content in this bundle\n\n- wp01177\n  - wp01177 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp01177 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/monetary-policy-and-corporate-liquid-asset-demand-15436"
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    "Authors: Woon Gyu Choi, Yungsan Kim",
    "Published: November 1, 2001",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451858877.001",
    "Proposes that monetary policy affects corporate liquidity demand directly through a separate channel called \"the loan commitment channel.\"",
    "Hypothesis: Upon persistent monetary policy shocks, firms substitute between sources of funds for intertemporal liquidity management, taking advantage of loan commitments and sluggish movements in loan rates.",
    "Empirical estimation of corporate liquidity demand using U.S. quarterly panel data.",
    "Controls for firm characteristics.",
    "Compares responses between S&P 500 firms and non-S&P firms.",
    "When monetary policy is tightened:",
    "The results support the existence of a loan commitment channel through which monetary policy directly affects corporate liquidity demand.",
    "Subjects: Asset and liability management, Bank credit, Currencies, Demand for money, Financial institutions, Liquidity, Loans, Money",
    "Keywords (as provided): assets ratio rise, Bank credit, cash reserves, commitment channel, Currencies, Demand for money, liquid asset demand, liquid asset holding, Liquidity, loan commitments, loan rate, Loans, market rate, monetary policy, opportunity cost, panel data, rate of return, WP",
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