Capital Expenditures and the Heterogeneous Response of Equity to Monetary Policy
نویسندگان
چکیده
This paper shows that on average, firms with higher levels of capital intensity experience larger responses in equity price to monetary policy action. This heterogeneous effect is economically large and statistically significant at high levels of confidence. These results suggest that monetary policy has important and substantial distributional implications on the US economy that can be measured by levels of firm capital intensity. This paper also shows that the marginal sensitivity of stock returns to capital intensity is not constant the effect size varies across subgroups and is observed to be highest in median intensity firms
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