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Do Asymmetries Matter for European Monetary Policy?

In: Exchange Rates and Global Financial Policies

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  • Yunus Aksoy
  • Paul De Grauwe
  • Hans Dewachter

Abstract

In this paper, we analyze the impact of economic and institutional (ECB decision rules) asymmetries on the effectiveness of monetary policy in Euroland. We consider a model where asymmetric shocks and divergent propagation of shocks in output and inflation are potential causes of tensions within the ECB concerning the conduct of common monetary (interest rate) policy. Welfare implications of the alternative decision procedures are discussed.

Suggested Citation

  • Yunus Aksoy & Paul De Grauwe & Hans Dewachter, 2014. "Do Asymmetries Matter for European Monetary Policy?," World Scientific Book Chapters, in: Exchange Rates and Global Financial Policies, chapter 13, pages 321-353, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814513197_0013
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