---
title: Prices and Monetary Policy: The Role of Financial Constraints
url: https://www.ml-quant.com/papers/repec/hhs-rbnkwp-0468/
site: ML-Quant (https://www.ml-quant.com)
updated: 2026-09-26
license: Summaries CC BY 4.0; links go to the original sources
index: https://www.ml-quant.com/llms.txt
identifier: RePEc:hhs:rbnkwp:0468
source_url: https://econpapers.repec.org/RePEc:hhs:rbnkwp:0468
featured: 2026-09-25
citations: unknown
topic: Macro-Finance & Rates
---


# Prices and Monetary Policy: The Role of Financial Constraints

Swedish data reveals that financially constrained firms adjust prices less to monetary shocks, materially dampening aggregate inflation response to policy changes.

- Source: https://econpapers.repec.org/RePEc:hhs:rbnkwp:0468
- Identifier: RePEc:hhs:rbnkwp:0468
- Released: 2026-09-14
- First featured: Quant Letter No. 132 (2026-09-25): https://www.ml-quant.com/issues/2026-09-25/
- Citations (Semantic Scholar): not tracked
- Published in: not yet
- Topic: Macro-Finance & Rates
- Authors: Bauer, Michael, Czarnota, Alexander, Klein, Mathias

## Related

- [Inflation—Who Cares? Monetary Policy in Times of Low Attention](https://www.ml-quant.com/papers/arxiv/2105.05297/): Who Cares?: The decrease in public attention to inflation after the Great Inflation period in the U.S. complicates managing inflation expectations and can lead to inflation-attention traps, suggesting a need to increase the inflation target.
- [Post-COVID inflation and the monetary policy dilemma: an agent-based scenario analysis](https://www.ml-quant.com/papers/arxiv/2306.01284/): A new modelling approach using the Mark-0 Agent-Based Model explores the impact of regulatory policies on inflationary dynamics resulting from COVID-19-related shocks.
- [Banking-System Heterogeneity and Monetary Policy Transmission in the Euro Area: High-Frequency Shocks, Local Projections, and Regime Dependence](https://www.ml-quant.com/papers/ssrn/7519040/): A 100-basis-point contractionary monetary shock lowers inflation and sales across 20 euro-area economies, with transmission strength varying by bank asset-risk exposure and assets-to-GDP ratio rather than a simple weak-strong taxonomy.
- [Inflation Data for Gold and Treasury Investments](https://www.ml-quant.com/papers/ssrn/5151557/): The piece examines the intricate relationship between inflation and the value of gold and treasury bonds, influenced by factors such as market sentiment and monetary policy.
- [Beware of Large Shocks! A Non-Parametric Structural Inflation Model](https://www.ml-quant.com/papers/ssrn/5244264/): The study introduces a Bayesian machine learning model for inflation that reacts strongly to large shocks.
- [An Interpretable Machine Learning Approach in Predicting Inflation Using Payments System Data: A Case Study of Indonesia](https://www.ml-quant.com/papers/arxiv/2506.10369/): A study shows machine learning algorithms, particularly the Extreme Gradient Boosting model, are more effective than traditional methods in predicting Indonesia's inflation.
