 Economic growth in the era of unconventional monetary instruments: A FAVAR approachCristiana Fiorelli and Valentina Meliciani Journal of Macroeconomics, 2019, vol. 62, issue C Abstract: After the global financial crisis, the ECB, as other major central banks, has introduced new monetary instruments to effectively respond to economic and financial shocks. This paper aims to analyse the role of monetary policy in the Eurozone's economic activity and studies responses of industrial production and inflation to standard and non-standard monetary tools. First, we perform a VAR model to estimate the effects of exogenous innovations in conventional and unconventional tools on industrial production and inflation. Then, to summarize the external economic developments, we condense the information contained in a large set of time series into a few factors, and then put these factors in a new VAR model (FAVAR). The results show that the unconventional policy has played an important role on economic and financial stabilization. The empirical model suggests also how the contemporaneous implementation of the two different policies is “big guns” on hand to ECB. Keywords: Economic growth; Eurozone crisis; Non-standard monetary policy; Monetary policy shock; FAVAR model (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:62:y:2019:i:c:s0164070417305839 DOI: 10.1016/j.jmacro.2019.01.004 Access Statistics for this article Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos More articles in Journal of Macroeconomics from Elsevier |
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