An EMU with Different Transmission Mechanisms

Giorgia Giovannetti () and Ramon Marimon

No 2016, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We develop and compute a dynamic equilibrium model where economies differ on the relative efficiency of financial intermediaries and, therefore on households portfolios and currency holdings. Our model economies have some of the features of the different financial structures in countries of the European Union and respond to monetary shocks in a way similar to the observed responses, which we also estimate. It follows that if differences on the relative efficiency of financial intermediaries persist in a monetary union, conflicts of interests in the pursuit of a common monetary policy can arise.

Keywords: ECB; limited participation; Monetary Policy; Transmission Mechanisms (search for similar items in EconPapers)
JEL-codes: E44 E52 F30 F33 F42 (search for similar items in EconPapers)
Date: 1998-11
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