Editorial
In this paper the authors study the role of financial systems for the cost channel transmission of monetary policy in a calibrated business cycle model. They analyze the different effects that monetary policy has on the economy, in particular on output and inflation, which are due to differences in countryspecific financial systems. For a plausible calibration of the model, differences in financial systems have a rather limited effect on the transmission mechanism and do not appear to give rise to cross country differences in the strength of the cost channel.