Differences in monetary policy transmission? A case not closed
AbstractThe advent of EMU inspired a large literature searching for differences in the monetary policy transmission among European countries. Stylised facts seemed to arise, classifying the countries as having either rapid or slow transmission. Our paper takes a comprehensive look at the existing empirical results, and finds few recurrent features supporting the presumed stylised facts. The econometric part examines the difficulties of meaningful identification of a monetary shock. The paper proposes a general approach to reducing the identification space through economic restrictions. We conclude that uncertainties in macro-econometric analysis are too large to allow establishing any statistically significant differences.
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Bibliographic InfoPaper provided by Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission in its series European Economy - Economic Papers with number 132.
Length: 44 pages
Date of creation: Nov 1998
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monetary policy; emu;
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