Services deepening and the transmission of monetary policy

Alessandro Galesi, Omar Rachedi

Producció científica: Article en revista indexadaArticleAvaluat per experts

12 Cites (Scopus)
13 Descàrregues (Pure)


The structural transformation from manufacturing to services comes with a process of services deepening: the services share of intermediate inputs rises over time. Moreover, inflation reacts less to monetary policy shocks in countries that are more intensive in services intermediates. We rationalize these facts using a two-sector New Keynesian model where trends in sectoral productivities generate endogenous variations in the Input–Output matrix. Services deepening reduces the contemporaneous response of inflation to monetary policy shocks through a marginal cost channel. Since services prices are stickier than manufacturing prices, the rise of services intermediates raises the sluggishness of sectoral marginal costs and inflation rates.

Idioma originalAnglès
Pàgines (de-a)1261-1293
Nombre de pàgines33
RevistaJournal of the European Economic Association
Estat de la publicacióPublicada - 1 d’ag. 2019
Publicat externament


Navegar pels temes de recerca de 'Services deepening and the transmission of monetary policy'. Junts formen un fingerprint únic.

Com citar-ho