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L’impact de la crise financière sur la performance de la politique monétaire conventionnelle de la zone euro

Author

Listed:
  • Ewen Gallic
  • Jean-Christophe Poutineau
  • Gauthier Vermandel

Abstract

This paper analyses the consequences of the financial crisis on the implementation of ECB conventional policy decisions.?We use the three equation new Keynesian model that was widely adopted before the 2007 financial crisis as the benchmark of the analysis.?Our main results underline a decrease in conventional monetary policy efficiency, following two main factors.?On the one side, we observe a worsening of the arbitrage between the variance of activity and that of inflation (namely the Taylor curve).?On the other side, our analysis underlines a clear departure from the efficiency frontier (as measured by the Taylor curve) coming from a high increase in the output gap.?We find that to overcome part of this inefficiency the ECB should have set lower interest rates than observed, even negative by the end of the period of our analysis.?This result provides a simple rationale for the adoption of new unconventional policy practices to overcome the consequences of the financial crisis. Classification JEL : F32, F34, F36, F44.

Suggested Citation

  • Ewen Gallic & Jean-Christophe Poutineau & Gauthier Vermandel, 2017. "L’impact de la crise financière sur la performance de la politique monétaire conventionnelle de la zone euro," Revue économique, Presses de Sciences-Po, vol. 68(HS1), pages 63-86.
    • Handle: RePEc:cai:recosp:reco_hs02_0063
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    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles

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