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Monetary policy measures in the euro area and their effects since 2014

Author

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  • M. MARX
  • B. NGUYEN
  • J.-G. SAHUC

Abstract

Inflation in the euro area has been significantly below its target level since the end of 2013. This can be passed on to long-term inflation expectations and is a reflection of the very progressive recovery. At a time when price stability was coming under threat, the Eurosystem embarked on a new phase of monetary accommodation in the summer of 2014, marked notably by massive purchases of government securities and negative policy rates. According to Eurosystem estimates, the asset purchase programme and the other non-standard measures taken since 2014 are expected to have an effect on average annual inflation of around 0.5 percentage point over the period 2015-2018 and a cumulative effect on the economic growth of the euro area of about 1.6 percentage points by 2018.

Suggested Citation

  • M. Marx & B. Nguyen & J.-G. Sahuc, 2016. "Monetary policy measures in the euro area and their effects since 2014," Rue de la Banque, Banque de France, issue 32, october..
    • Handle: RePEc:bfr:rueban:2016:32
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    File URL: https://publications.banque-france.fr/sites/default/files/medias/documents/rue-de-la-banque_32_2016-10_en.pdf
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    References listed on IDEAS

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    1. repec:hal:spmain:info:hdl:2441/3t12lkolqm85v9rk22ov8gbimf is not listed on IDEAS
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    3. Breckenfelder, Johannes & De Fiore, Fiorella & Andrade, Philippe & Karadi, Peter & Tristani, Oreste, 2016. "The ECB's asset purchase programme: an early assessment," Working Paper Series 1956, European Central Bank.
    4. Arvind Krishnamurthy & Annette Vissing-Jorgensen, 2011. "The Effects of Quantitative Easing on Interest Rates: Channels and Implications for Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(2 (Fall)), pages 215-287.
    5. Pietro Cova & Patrizio Pagano & Massimiliano Pisani, 2015. "Domestic and international macroeconomic effects of the Eurosystem expanded asset purchase programme," Temi di discussione (Economic working papers) 1036, Bank of Italy, Economic Research and International Relations Area.
    6. Pietro Cova & Giuseppe Ferrero, 2015. "The Eurosystem�s asset purchase programmes for monetary policy purposes," Questioni di Economia e Finanza (Occasional Papers) 270, Bank of Italy, Economic Research and International Relations Area.
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    Cited by:

    1. Sarah Mouabbi & Jean‐Guillaume Sahuc, 2019. "Evaluating the Macroeconomic Effects of the ECB's Unconventional Monetary Policies," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 51(4), pages 831-858, June.
    2. Legroux, Vincent & Rahmouni-Rousseau, Imène & Szczerbowicz, Urszula & Valla, Natacha, 2022. "Stabilising virtues of central banks: (Re)matching bank liquidity," Journal of Banking & Finance, Elsevier, vol. 134(C).
    3. Ralph S.J. Koijen & François Koulischer & Benoît Nguyen & Motohiro Yogo, 2018. "Eurosystem asset purchases and portfolio rebalancing in the euro area," Rue de la Banque, Banque de France, issue 60, April.

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