FED vs. ECB: Which matters most for Visegrad economies? Evidence from a Bayesian VAR model

Monika Junicke and Vincenzo Merella

Politická ekonomie, vol. preprint

Abstract: This paper employs a VAR model with economically meaningful structural restrictions to examine how monetary policy shocks originating from the FED and the ECB influence macroeconomic variables in Central European economies, specifically the Visegrad Group (V4). We investigate whether US monetary policy shocks impact the V4 independently or primarily through Germany. Our results indicate that US monetary policy shocks significantly affect V4 macroeconomic variables, at times equalling or surpassing the influence exerted by their European counterparts, even after accounting for indirect effects transmitted through Germany. Additionally, our findings highlight the dominance of the income absorption effect, leading to output contractions in these small open economies.

Keywords: Monetary policy; Federal Reserve System; European Central Bank; Visegrad Group; structural restrictions; monetary policy shocks (search for similar items in EconPapers)
References: Add references at CitEc
Citations:

Downloads: (external link)
http://polek.vse.cz/doi/10.18267/j.polek.1524.html (text/html)
free of charge

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:prg:jnlpol:v:preprint:id:1524

Ordering information: This journal article can be ordered from
Redakce Politické ekonomie, Vysoká škola ekonomická, nám. W. Churchilla 4, 130 67 Praha 3
http://polek.vse.cz

DOI: 10.18267/j.polek.1524

Access Statistics for this article

Politická ekonomie is currently edited by Jiřina Bulisová

More articles in Politická ekonomie from Prague University of Economics and Business Contact information at EDIRC.
Bibliographic data for series maintained by Stanislav Vojir ().