Monetary policy reshapes job market, benefiting cash-constrained firms.
The article examines how monetary policy affects different types of companies based on their financial situation. When the central bank increases money supply, firms that rely on external financing hire more workers. On the other hand, firms with internal funds hire more when they experience productivity improvements. This shows that monetary policy can shift resources between companies with different financial capabilities. Financially constrained firms react strongly to monetary policy changes but are less affected by productivity shocks compared to unconstrained firms.