The role of money and monetary policy in crisis periods: the Euro area case

Jonathan Benchimol and Andre Fourcans ()

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Abstract: In this paper, we test two models of the Eurozone, with a special emphasis on the role of money and monetary policy during crises. The role of separability between money and consumption is investigated further and we analyse the Euro area economy during three different crises: 1992, 2001 and 2007. We find that money has a rather signi ficant role to play in explaining output variations during crises whereas, at the same time, the role of monetary policy on output decreases significantly. Moreover, we find that a model with non-separability between consumption and money has better forecasting performance than a baseline separable model over crisis periods.

Keywords: Euro area; Money; DSGE forecasting (search for similar items in EconPapers)
Date: 2012-02-22
Note: View the original document on HAL open archive server: https://essec.hal.science/hal-00672806v1
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Related works:
Journal Article: MONEY AND MONETARY POLICY IN THE EUROZONE: AN EMPIRICAL ANALYSIS DURING CRISES (2017)
Working Paper: The role of money and monetary policy in crisis periods: the Euro area case (2012)
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