Latest / AI Economics Research Podcast
Bank of England: Why Interest Rate Hikes Hurt Innovation Differently Across Firms (Explained)
This episode delves into a Bank of England research paper exploring how monetary policy's effects on innovation and productivity can be surprisingly persistent. We break down findings showing that firms without access to cash flow-based borrowing—lending against earnings rather than physical collateral—cut R&D significantly more after interest rate hikes, leading to lasting impacts on economic output. Discover the crucial role of firm financing in the transmission of monetary policy and how expanding access to finance could mitigate these losses. For your thoughts and questions, email us at…
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