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Monetary policy in Europe vs the US: what explains the difference?

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  • Harald Uhlig

Abstract

This paper compares monetary policy in the US and EMU during the last decade, employing an estimated hybrid New Keynesian cash-in-advance model, driven by five shocks. It appears that the difference between the two monetary policies between 1998 and 2006 is due to both surprises in productivity as well as surprises in wage demands, moving interest rates in opposite directions in Europe and the US, but not due to a more sluggish response in Europe to the same shocks or to different monetary policy surprises.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14996.

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Date of creation: May 2009
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Publication status: published as Monetary Policy in Europe versus the United States: What Explains the Difference? , Harald Uhlig. in International Dimensions of Monetary Policy , Gali and Gertler. 2009
Handle: RePEc:nbr:nberwo:14996

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Cited by:
  1. Mardi Dungey & Denise Osborn, 2009. "Modelling International Linkages for Large Open Economies: US and Euro Area," CAMA Working Papers 2009-24, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  2. Sergei Ivashchenko, 2013. "Dynamic stochastic general equilibrium model with banks and endogenous defaults of firms," EUSP Deparment of Economics Working Paper Series Ec-02/13, European University at St. Petersburg, Department of Economics.

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