Monetary policy and innovation in Europe: An SVAR approach

Gianni Carvelli, Eleonora Bartoloni and Maurizio Baussola

Finance Research Letters, 2024, vol. 66, issue C

Abstract: Using quarterly data, we estimate the effects of monetary policy on innovation in the Eurozone over 2000–2021. Variations in the monetary stance may affect how firms and governments allocate resources to innovative investments. The identification of the structural shocks relies on an SVAR framework with a set of exclusion restrictions. Although characterised by the predominance of ZLB periods, conventional monetary policy shocks affect private and public R&D spending in the medium term with some initial inertia. Unconventional monetary shocks affect innovative expenditure in the short to medium term, but their impacts vanish in the longer run.

Keywords: ECB; Monetary policy; Structural VAR; Innovation (search for similar items in EconPapers)
JEL-codes: E31 E40 E52 O30 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:66:y:2024:i:c:s1544612324007608

DOI: 10.1016/j.frl.2024.105730

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