The Impact of the European Central Bank’s Interest Rates on Investments in the Euro Area

Joanna Stawska and Katarzyna Miszczyńska

Gospodarka Narodowa. The Polish Journal of Economics, 2017, issue 5, 51-72

Abstract: The main objective of this paper is to examine the impact of the central bank’s interest rates on investments in the euro area. The results of the analysis indicate that in 1999-2016 the European Central Bank’s main interest rate lagged by two quarters had an inversely proportionally and statistically significant influence on the level of investment outlays in the euro area. The disturbances that euro-area economies were experiencing in the analysis period due to the recent financial crisis considerably weakened the monetary policy’s effect on the real economy. However, the relationship between the ECB’s main interest rate and investment outlays was statistically significant, implying that the interest rate played a role in the central bank’s influence on investments.

Keywords: central bank; interest rate; investments; euro area; VAR (search for similar items in EconPapers)
JEL-codes: E22 E43 E52 E58 F33 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:sgh:gosnar:y:2017:i:5:p:51-72

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