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

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  • Ewen Gallic

    (Université de Rennes 1, CREM UMR CNRS 6211, France)

  • Jean-Christophe Poutineau

    (Université de Rennes 1, CREM UMR CNRS 6211, France)

  • Gauthier Vermandel

    (Université Paris-Dauphine et PSL Research University, France)

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.

Suggested Citation

  • Ewen Gallic & Jean-Christophe Poutineau & Gauthier Vermandel, 2017. "L’impact de la crise fiancière sur la performance de la politique monétaire conventionnelle de la zone euro," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 2017-06, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
  • Handle: RePEc:tut:cremwp:2017-06
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    More about this item

    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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