Monetary Policy Conditions in Spain Before and After the Changeover to the Euro: A Taylor Rule Based Assessment

Dirk Bleich and Ralf Fendel

Review of Applied Economics, 2012, vol. 08, issue 01, 17

Abstract: This paper analyzes monetary policy conditions in Spain before and after the changeover to the Euro as the single European currency. We use forward-looking Taylor-type rules to describe the Banco de España's pre-Euro monetary policy and find that it was clearly inflation stabilizing. Compared to this we find that the monetary policy stance of the European Central Bank (ECB) since 1999 which was appropriate for the euro area as a whole was too expansionary for Spain's economy. The resulting cheap credit conditions for real estate must be seen as an important explanation for Spain's housing boom.

Keywords: Financial Economics; Industrial Organization; International Relations/Trade; Political Economy; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:reapec:143463

DOI: 10.22004/ag.econ.143463

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