The Regional Transmission of UK Monetary Policy

Citation

Dow S & Montagnoli A (2007) The Regional Transmission of UK Monetary Policy. Regional Studies, 41 (6), pp. 797-808. https://doi.org/10.1080/00343400601142779

Abstract
Concerns have been raised in the media about a ‘one-size-fits-all’ monetary policy for the UK. If there are diverse economic conditions in different regions, then a unitary monetary policy cannot suit all. The purpose of this paper is to explore this issue further by breaking it down into two separate issues. First there is the more conventional way of considering the question, in terms of the effect of a particular interest rate change on regions experiencing different economic conditions. This requires a consideration of the nature and causes of regional economic disparities in the UK, and how these might be affected by particular interest rate changes. But there is further the question of how monetary policy is transmitted to the different regions. The possibility is considered that there may be regional differences in how a particular monetary policy is translated into different financial conditions in different regions. In other words there may be a regional dimension to the transmission process itself. The focus here will be on the regional structure of the financial sector and financial behaviour, and in particular the credit market. The argument is explored further with a comparison of Scottish and UK data.

Keywords
regional; monetary policy

Journal
Regional Studies: Volume 41, Issue 6

• reg transmission of monetary policy 2111 06.pdf