National Specifities and Monetary-Policy Trasmission in Europe

Francesco Carlucci and Alessandro Girardi

No 73, Working Papers in Public Economics from Department of Economics and Law, Sapienza University of Roma

Abstract: This work presents five structural co-integrating VAR models used to describe the economies of France, Germany, Italy, the Netherlands and Spain in the years 1983-1998 and to analyse their economic policies. Shortrun dynamics move around the long-run structure, represented by money, goods and capital market equilibrium conditions. The fitting of the reference theoretical model to the data is not imposed a priori but empirically tested. Long- and short-run properties of models highlight deep heterogeneities in the economic structures and in the monetary policy transmission mechanism among the countries. Germany plays a dominant role in the European economy and, together with the Netherlands, seems to have formed an economic area where the money, goods and capital markets are integrated. France is linked to this area, while Italy turns out to be less integrated. Finally, Spain seems to be completely disjoined.

Keywords: Structural co-integrating VAR model; Monetary policy; EMU. (search for similar items in EconPapers)
JEL-codes: C12 C32 E00 (search for similar items in EconPapers)
Pages: 32
Date: 2004-05
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Citations: View citations in EconPapers (1)

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