Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 1, 2021 erstellt
Beschreibung:
This paper demonstrates an efficiency-enhancing role of monetary policy through equity payouts. Empirically, I show that cash-rich firms have higher equity payouts and higher stock prices in response to expansionary monetary policy surprises. Higher stock price reactions occur despite weak cash flow, investment, and credit responses to monetary policy, thus suggesting a tight link between observed firm values and the payout channel. I rationalize the empirical evidence in a New Keynesian model where firms finance investment with cash and equity issuance. Monetary easing weakens precautionary cash demand, leading cash-rich firms to allocate excess funds to shareholders optimally. Since payouts are procyclical, cash-rich firms earn higher returns in expansionary periods. These findings stand against the view that the payout channel is inefficient and socially undesirable