Banks and the State-Dependent Effects of Monetary Policy
Martin S. Eichenbaum, Federico Puglisi, Sergio Rebelo, Mathias Trabandt
NBER Working Papers,
Nr. 33523,
2025
Abstract
We show that the response of banks’ net interest margin (NIM) to monetary policy shocks is state dependent. Following a period of low (high) Federal Funds rates, a contractionary monetary policy shock leads to an increase (decrease) in NIM. Aggregate economic activity exhibits a similar state-dependent pattern. To explain these dynamics, we develop a banking model in which social interactions influence households’ attentiveness to deposit interest rates. We embed that framework within a nonlinear heterogeneous-agent NK model. The estimated model accounts well quantitatively for our key empirical findings.
Artikel Lesen
Alumni
IWH-Alumni Das IWH pflegt den Kontakt zu seinen ehemaligen Mitarbeiterinnen und Mitarbeitern weltweit. Wir beziehen unsere Alumni in unsere Arbeit ein und unterrichten diese…
Zur Seite
Job Market Candidates
Job Market Candidates Marius Fourné Marius Fourné is a PhD candidate in Economics at the Halle Institute for Economic Research (IWH) and Martin Luther University of…
Zur Seite
Department Profiles
Research Profiles of the IWH Departments All doctoral students are allocated to one of the four research departments (Financial Markets – Laws, Regulations and Factor Markets –…
Zur Seite
Alumni
Alumni IWH provides guidance and support in job placement after graduation, including letters of recommendation and career advice. Graduates have found placements in academia…
Zur Seite
Past Events
Past Events 14. CompNet Annual Conference (Vilnius, 25-26 September 2025) The 14th CompNet Annual Conference, co-hosted with the Bank of Lithuania, took place on 25–26 September…
Zur Seite
3rd TSI Workshop
Presentations 3rd TSI Workshop Vienna The 3rd TSI Workshop, spanning two days, featured presentations and discussions on various aspects of micro data analysis and the Micro Data…
Zur Seite
Monetary Policy
Monetary policy How firms respond to sudden changes in profitability affects the process of job creation, job destruction, aggregate investment and how fast resources are…
Zur Seite
MDI Research Lab
Extended MDI Output The Extended MDI Output research projects encompass diverse areas, including Trade and Competitiveness, investigating productivity diffusion within Global…
Zur Seite
CompNet & ECB Annual Conference
CompNet & ECB Annual Conference On 22 September 2020, a short online event took place. Please find all material below to be downloaded from the online conference. The coronavirus…
Zur Seite
