
The Equity Constraint Channel of Monetary Policy
Using a measure of equity and debt financial constraint, we show that equity frictions are central to understanding the transmission of monetary policy to the corporate sector.

Using a measure of equity and debt financial constraint, we show that equity frictions are central to understanding the transmission of monetary policy to the corporate sector.

Using consumer credit recrods, we show that monetary tighening increases household debt, particularly among financially constrained borrowers.