Keywords: monetary transmission, stock prices, Tobin's q, investment, capital structure
JEL codes: D83, E22, E44, E52, G12, G31, G32
Abstract
We study the effects of monetary-policy-induced changes in Tobin's q on corporate investment and capital structure. We develop a theory of the mechanism, provide empirical evidence, evaluate the ability of the quantitative theory to match the evidence, and quantify the relevance for monetary transmission to aggregate investment.
Published as: Q-Monetary Transmission
in Journal of Political Economy
, Vol. 132,
No. 3,
971 - 1012,
December, 2023
