Events

26. May 2025, 16:00 until 17:30

Economic Theory & Policy Seminar / J. Jungherr (University of Bonn) / Corporate debt maturity matters for monetary policy

Seminar

Joachim Jungherr will give a talk at our Economic Theory and Policy Seminar.

Joachim Jungherr, opens an external URL in a new window (University of Bonn)

“Corporate debt maturity matters for monetary policy”

We provide novel empirical evidence that firms’ investment is more responsive to monetary policy when a higher fraction of their debt matures. In a heterogeneous firm New Keynesian model with financial frictions and endogenous debt maturity, two channels explain this finding: (1.) Firms with more maturing debt have larger roll-over needs and are therefore more exposed to fluctuations in the real interest rate (roll-over risk). (2.) These firms also have higher default risk and therefore react more strongly to changes in the real burden of outstanding nominal debt (debt overhang). Unconventional monetary policy, which operates through long-term interest rates, has larger effects on debt maturity but smaller effects on output and inflation than conventional monetary policy.

Calendar entry

Event details

Event location
TU Wien
1040 Vienna
Wiedner Hauptstr. 8-10, Seminarroom: Sem.R. DA green 04 (Freihaus Building, 4th floor, green area)
Organiser
ECON
Julia Hutter
julia.hutter@tuwien.ac.at
Public
Yes
Entrance fee
No
Registration required
No