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The Monetary Policy Transmission Mechanism under Financial Distress. An Overview


  • Roman Angela

    () („Alexandru Ioan Cuza” University of Iaºi, Faculty of Economics and Business Administration)

  • Avadanei Andreea

    () („Alexandru Ioan Cuza” University of Iaºi, Doctoral of Economics)


The aim of the present paper is to underline the international financial crisis implications on the monetary policy transmission mechanism at the European level. Our study illustrates the main features of the pass-through process in the light of recent financial tensions and the general impact of Eurosystem’s non-standard measures on the functioning of monetary transmission channels. Our results outline that pass-through process remained operational during the crisis and that unconventional measures ensured a proper functioning of transmission of monetary policy impulses to real economy. The extent to which this mechanism has been irreversibly damaged by the credit crunch is premature to determine and thus it would be misleading to draw definitive conclusions, especially when some non-standard measures are still in place and financial tensions persist.

Suggested Citation

  • Roman Angela & Avadanei Andreea, 2011. "The Monetary Policy Transmission Mechanism under Financial Distress. An Overview," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 1832-1838, May.
  • Handle: RePEc:ovi:oviste:v:11:y:2011:i:1:p:1832-1838

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    monetary transmission mechanism; pass-through process; financial distress; unconventional measures;

    JEL classification:

    • D53 - Microeconomics - - General Equilibrium and Disequilibrium - - - Financial Markets
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G01 - Financial Economics - - General - - - Financial Crises


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