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Measuring the Effects of Monetary Policy in the Euro Area: The Role of Anticipated Policy

  • Jan Gottschalk
  • Florian Höppner
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    This paper investigates within a SVAR framework the effects of anticipated monetary policy in the euro area. Building on a procedure recently proposed by Cochrane which yields the response of output to an anticipated monetary policy impulse, we show that in the past twenty years anticipated monetary policy has had a considerable influence on output. Moreover, we compute the output effects of the systematic monetary policy response to aggregate demand and supply shocks and find that monetary policy pursues a counter-cyclical policy in response to demand shocks and, despite considerable lags, is pro-cyclical with regard to supply shocks.

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    File URL: https://www.ifw-members.ifw-kiel.de/publications/measuring-the-effects-of-monetary-policy-in-the-euro-area-the-role-of-anticipated-policy/kap1074.pdf
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    Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1074.

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    Length: 82 pages
    Date of creation: Aug 2001
    Date of revision:
    Handle: RePEc:kie:kieliw:1074
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