Do Financial Markets Learn from ECB Monetary Policy?
Posted: 2 Nov 2011 Last revised: 30 May 2013
Date Written: October 31, 2011
This article examines the magnitude of stock market reactions around European Central Bank (ECB) monetary policy announcements. Since the introduction of ECB, the declining absolute abnormal returns have been compatible with stock market learning from ECB monetary policy making. The Eurozone financial markets extract information from the ECB announcements and consider the information before making investing decisions. Furthermore, the credibility of ECB has been increasing over time.
Keywords: Monetary Policy, CAR, Learning
JEL Classification: E52, E58, G14
Suggested Citation: Suggested Citation