SFS Cavalcade North America 2026
Darden Graduate School of Business Administration, University of Virginia
May 18-21, 2026
Conference Agenda
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
Please note that all times are shown in the time zone of the conference. The current conference time is: 18th June 2026, 06:50:14pm EDT
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Track T6-1: Monetary Policy
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Monetary Policy and Investment Plans 1University of Chicago Booth School of Business; 2MIT Sloan School of Management We explore how monetary policy affects corporate investment decisions, and why there are long lags in transmission. To do so, we hand-collect a firm-level dataset of U.S. investment plans and link it to managers’ cash-flow expectations. Plans strongly predict realized investment, and allow us to observe decision changes separately from implementation. Using high-frequency monetary policy surprises, we show that firms revise investment plans in response to monetary policy, but the response varies by horizon: long-horizon plans are much more sensitive to policy than near-term plans. Consistent with theories of capital production frictions, plans for new projects respond more to monetary policy than plans related to ongoing projects. These results help to explain the long lags in monetary policy transmission. Regarding transmission mechanisms, we document evidence of a cost of capital channel. Cash flow expectations respond to policy but explain a small fraction of investment-plan adjustments for firms in our sample.
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