Rise of services in advanced economies weakens transmission of monetary policy, paper argues
Service sector has “stickier prices” than manufacturing, researchers say
Advanced economies are becoming less responsive to monetary policy as they rely more on services rather than manufacturing, according to a working paper published by the Bank of Spain.
In Structural transformation, services deepening, and the transmission of monetary policy, Alessandro Galesi and Omar Rachedi argue that structural change in advanced economies "comes with a process of services deepening". They study this shift by using data from the US economy between 1947 and 2005, in the
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