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The research investigates how financial heterogeneity among firms influences their investment responses to monetary policy in Latin American economies.

April 10, 2026EconomiesOpen Access

Effects of Monetary Policy on Investment Dynamics in Latin American Economies Through a Model with Heterogeneous Firms

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RMRodney MenezesUniversity of Buenos Aires

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Implication

Examines how financial heterogeneity affects investment responses to monetary policy in Latin American economies, indicating its significance.

Key Points

The research investigates how financial heterogeneity among firms influences their investment responses to monetary policy in Latin American economies.
Developed an extended theoretical model with heterogeneous firms calibrated for Latin America.
Validated the model using local projection models.
Analyzed data from 72 representative firms across six Latin American economies and simulated data for comparison.
Financial heterogeneity significantly affects firms' investment responses to monetary shocks.
Firms with weaker financial positions restrict investment during monetary expansions, while stronger firms tend to increase it.
Ignoring firm heterogeneity leads to overestimating the investment responses to monetary policy shocks.

Cite This Study

Rodney Menezes (2026) studied this question.

synapsesocial.com/papers/69d895046c1944d70ce05f1e https://doi.org/10.3390/economies14040120

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Implication

Examines how financial heterogeneity affects investment responses to monetary policy in Latin American economies, indicating its significance.

Effects of Monetary Policy on Investment Dynamics in Latin American Economies Through a Model with Heterogeneous Firms

Discussion

Member takes

Implication

Key Points

Cite This Study

Effects of Monetary Policy on Investment Dynamics in Latin American Economies Through a Model with Heterogeneous Firms

Discussion

Member takes

Implication

Key Points

Cite This Study

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