EMU and asymetries in the monetary policy transmission

The decision to launch EMU has focused attention on possible asymmetries in output and prices responses to the single monetary policy across EU countries. Unfortunately, the numerous attempts to establish the extent of such asymmetries in the context of empirical macroeconomic models have not provided a consistent and robust picture of cross-country differences in monetary transmission and they are affected by methodological problems. This state of affairs has revamped interest in microeconomic studies comparing economic and financial structures across countries, as these are ultimately responsible for any differences in the way monetary impulses are transmitted throughout the economy. This study takes stock of the insights and the empirical evidence from this latter strand of research, and discusses the possible evolution of economic and financial structures in EMU.