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Volume
1, No. 2,
August 2002
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Regional Effects of Monetary Policy
in the Netherlands
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Ivo J. M.
Arnold
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Center for Finance, Universiteit
Nyenrode, The Netherlands
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Evert
B. Vrugt*
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Center for Finance, Universiteit
Nyenrode, The Netherlands
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Abstract
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This paper measures the impact
of monetary policy shocks on regional and sectoral
output in the Netherlands for the period 1973 to
1993. We document large regional and sectoral
variation in monetary policy transmission. Our
results support previous findings that the
differential regional effects of monetary policy
are significantly related to industrial
composition. We also find that sectoral effects
account for much more of the variation in interest
sensitivity than regional effects. Finally, we
explore whether sectors which react more strongly
to interest rate shocks are compensated by higher
returns.
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Key words
: monetary transmission; sectoral
effects; regional effects
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JEL classification
: E50; R10
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