Monetary Policy Transmission in the Euro Area: What Do Aggregate and National Structural Models Tell Us?
By Peter van Els, A. Locarno, J. Morgan, Jean-Pierre Villetelle. Social Science Research Network, 2001
155 citations recorded by the source corpus.
This paper analyses the monetary transmission mechanism in the euro area through the use of large scale macroeconomic models at the disposal of the European Central Bank and the National Central Banks of the Eurosystem. The results reported are based on a carefully designed common simulation experiment involving a 100 basis point rise in the policy interest rate for two years accompanied by common assumptions regarding the path of long-term interest rates and the exchange rate. Aggregating the country level results, the fall in output is found to reach a maximum of 0.4% after 2 years. The maximum aggregate fall in prices is also 0.4%, but it occurs 2 years later. The dominant channel of transmission in the first two years is the exchange rate channel, but in terms of the impact on output, the user cost of capital channel becomes dominant from the third year of the simulation onwards JEL Classification: C50, E17, E5
View Paper: https://www.semanticscholar.org/paper/32ac2ca741a6aededef441e26353b5f86ac85980
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
- Jean-Bernard Chatelain
- A. Generale
- I. Hernando
- P. Vermeulen
- U. Kalckreuth
- Michael Ehrmann
Citations in the corpus
- The Output Composition Puzzle: A Difference in the Monetary Transmission Mechanism in the Euro Area and U.S. (2003, unknown): “The second is an aggregation of results from national models developed by the national central banks (NCBs; see van Els et al., 2001).”
- New Findings on Firm Investment and Monetary Transmission in the Euro Area (2001, methodology): “Van Els et al. (2001) report on simulations carried out using central bank aggregate models.”
- The Transmission of Monetary Policy in the Euro Area: Are the Effects Different Across Countries?* (2004, result): “The former experiment is also done in a more recent study of van Els et al. (2001) for most Euro area countries.”
- Monetary Transmission in the Euro Area: Where Do We Stand? (2002, unknown): “(2001), that provides a summary of the results for the four largest countries, and on the papers by Butzen et al. (2001), Lünemann and Mathä (2001) and Valderrama (2001), that provide results for Belgium, Luxembourg and Austria respectively.”