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Asymmetric monetary policy: empirical evidence for Italy

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  • Anna Florio

Abstract

A growing body of empirical work has examined the potential asymmetry in the effects of monetary policy on United States real activity. This study looks for such an empirical evidence for Italy in the period 1982-1998. Monetary shocks are obtained as residuals from a central bank reaction function where the three-months interbank rate is taken as the indicator of the monetary policy stance. The effects of these positive and negative shocks on output are statistically different from zero and the null of symmetry between the two is rejected in favour of negative shocks having a greater impact on real output growth, thus confirming an asymmetric effect of monetary policy even for Italy.

Suggested Citation

  • Anna Florio, 2005. "Asymmetric monetary policy: empirical evidence for Italy," Applied Economics, Taylor & Francis Journals, vol. 37(7), pages 751-764.
    • Handle: RePEc:taf:applec:v:37:y:2005:i:7:p:751-764
    DOI: 10.1080/00036840500061012
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    3. Zare , Roohollah, 2015. "Asymmetric Effects of Monetary Policy and Business Cycles in Iran using Markov-switching Models," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 10(4), pages 125-142, October.
    4. Jeevan Kumar Khundrakpam, 2017. "Examining the Asymmetric Impact of Monetary Policy in India," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 11(3), pages 290-314, August.
    5. Furceri, Davide & Loungani, Prakash & Zdzienicka, Aleksandra, 2018. "The effects of monetary policy shocks on inequality," Journal of International Money and Finance, Elsevier, vol. 85(C), pages 168-186.
    6. Khundrakpam, Jeevan Kumar, 2013. "A Note on Differential Asymmetric Effects of Money Supply and Policy Rate Shocks in India," MPRA Paper 53058, University Library of Munich, Germany.
    7. Ansgar Belke & Thorsten Polleit, 2007. "How the ECB and the US Fed set interest rates," Applied Economics, Taylor & Francis Journals, vol. 39(17), pages 2197-2209.
    8. Jesus Garcia-Iglesias, 2007. "How the European Central Bank decided its early monetary policy?," Applied Economics, Taylor & Francis Journals, vol. 39(7), pages 927-936.
    9. Dobromł Serwa, 2006. "Do emerging financial markets react to monetary policy announcements? Evidence from Poland," Applied Financial Economics, Taylor & Francis Journals, vol. 16(7), pages 513-523.

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