Link to the University of Pittsburgh
Link to the University Library SystemContact us link
AEI Banner

Does All Fit One Size? An evaluation of the ECB policy response to changing economic conditions in the Euro area member states. ACES Cases No. 2008.1

Lee, Jim and Crowley, Patrick M. (2008) Does All Fit One Size? An evaluation of the ECB policy response to changing economic conditions in the Euro area member states. ACES Cases No. 2008.1. UNSPECIFIED.

[img] PDF - Published Version
Download (409Kb)

    Abstract

    This paper empirically investigates the extent to which the European Central Bank has responded to evolving economic conditions in its member states as opposed to the euro area as a whole. Based on a forward-looking Taylor rule-type policy reaction function, we conduct counterfactual exercises that compare the monetary policy behavior of the ECB with two alternative hypothetical scenarios: (1) were the euro member states to make individual policy decisions, and (2) were the ECB to respond to the economic conditions of individual members. The results reflect the extent of heterogeneity among the national economies in the monetary union and indicate that the ECB's monetary policy rates have been particularly close to the "counterfactual" interest rates of its largest euro members, as well as of countries with similar economic conditions, which includes Germany, Austria, Belgium and France.

    Export/Citation:EndNote | BibTeX | Dublin Core | ASCII (Chicago style) | HTML Citation | OpenURL
    Social Networking:
    Item Type: Other
    Subjects for non-EU documents: EU policies and themes > EU institutions & developments > European Central Bank
    Countries > Austria
    Countries > Belgium
    Countries > France
    Countries > Germany
    EU policies and themes > Policies & related activities > economic and financial affairs > monetary policy
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > American Consortium on European Union Studies > ACES Cases
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 14 Jan 2015 14:59
    Number of Pages: 38
    Last Modified: 14 Jan 2015 14:59
    URI: http://aei.pitt.edu/id/eprint/59171

    Actions (login required)

    View Item

    Document Downloads