The Regional Effects of Monetary Policy in Europe

Ivo Arnold ()

Journal of Economic Integration, 2001, vol. 16, 399-420

Abstract:

Since the inception of EMU, a common concern is that European monetary policy may have differential effects on EMU member countries. However, the reliance on cross-country evidence in the empirical literature risks overemphasizing the importance of cross-country differences in monetary transmission. This paper therefore takes a regional approach. Data from 58 European regions show significant cross-regional differences in the effects of monetary policy within the five largest EU countries. For all regions combined, I find a significant relationship between the impact of monetary policy and the industrial composition of regions, supporting earlier findings for the US. I conclude that at present the large European countries are regionally well-diversified enough to minimize the risk that ECB policy will produce a markedly different impact across countries.

Keywords: Monetary Transmission; Regional Effects; EMU (search for similar items in EconPapers)
JEL-codes: E50 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0171

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