Monetary Policy in the Euro Area - Lessons from the First Years
AbstractThis paper investigates in a consistent semi-structural empirical framework three current issues of monetary policy in the euro area. First, regarding policy transmission we offer a three-stage procedure to combine the efficient estimation of economic structure prior to EMU with current ECB monetary policy. Second, we test whether the regime change leads - before or after - EMU to structural instability. Third, we investigate the stance of monetary policy in Europe. We compare a "counterfactual" ECB reaction function based on average interest rates prior to EMU with actual ECB policy. Furthermore, we compare actual ECB policy with interest rate projections using Bundesbank reaction functions and euroland data.
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Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 0205006.
Date of creation: 24 May 2002
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European Monetary Union; Monetary policy; Semi-structural modelling; Reaction function; Taylor rule; Transmission mechanism;
Other versions of this item:
- Hayo, Bernd & Volker Clausen, 2003. "Monetary Policy in the Euro Area - Lessons from the First Years," Royal Economic Society Annual Conference 2003 103, Royal Economic Society.
- Clausen, Volker & Hayo, Bernd, 2002. "Monetary policy in the Euro area: Lessons from the first years," ZEI Working Papers B 09-2002, ZEI - Center for European Integration Studies, University of Bonn.
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-06-13 (All new papers)
- NEP-EEC-2002-06-13 (European Economics)
- NEP-IFN-2002-06-13 (International Finance)
- NEP-MON-2002-06-13 (Monetary Economics)
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- Michele Fratianni & Juergen Hagen, 1990. "German dominance in the EMS," Open Economies Review, Springer, vol. 1(1), pages 67-87, February.
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