New Macroeconomic Evidence on Monetary Policy Transmission in the Euro Area
Peter van Els,
Alberto Locarno (),
Benoit Mojon and
Julian Morgan
Additional contact information
Peter van Els: De Nederlandsche Bank,
Journal of the European Economic Association, 2003, vol. 1, issue 2-3, 720-730
Abstract:
This paper presents some new macroeconomic evidence on the transmission mechanism of monetary policy in the euro area. The evidence is drawn from a number of collaborative research projects undertaken by the ECB and the National Central Banks (NCBs) of the euro area and utilizes a variety of national and euro area aggregate VAR and structural macroeconomic models. A qualitatively similar pattern of results following a monetary policy shock is observed across models, with the maximum output effect typically occurring after 1-2 years. Price effects are somewhat slower to materialize and are more persistent. According to both sets of results, investment is the main (domestic) contributor to the drop in real GDP. This contrasts with findings for the United States where consumption plays a dominant role in the transmission process. Finally, structural macroeconomic models predict that if the exchange rate moves in line with an Uncovered Interest Parity (UIP) condition, the short-run output and price effects are largely driven by the exchange rate channel. (JEL: C50, C52, E52, E17, E5) Copyright (c) 2003 The European Economic Association.
Date: 2003
References: Add references at CitEc
Citations: View citations in EconPapers (121)
Downloads: (external link)
http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1542-4774/issues link to full text (text/html)
Access to full text is restricted to subscribers.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:tpr:jeurec:v:1:y:2003:i:2-3:p:720-730
Access Statistics for this article
Journal of the European Economic Association is currently edited by Xavier Vives, George-Marios Angeletos, Orazio P. Attanasio, Fabio Canova and Roberto Perotti
More articles in Journal of the European Economic Association from MIT Press
Bibliographic data for series maintained by The MIT Press ().