Do Euro Area Countries Respond Asymmetrically to the Common Monetary Policy?

22 Pages Posted: 27 Aug 2014

See all articles by Matteo Barigozzi

Matteo Barigozzi

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES); London School of Economics and Political Science; University of Bologna

Antonio Maria Conti

Banca d'Italia

Matteo Luciani

Board of Governors of the Federal Reserve System

Multiple version iconThere are 3 versions of this paper

Date Written: October 2014

Abstract

We investigate the possible existence of asymmetries among Euro Area countries reactions to the European Central Bank monetary policy. Our analysis is based on a Structural Dynamic Factor model estimated on a large panel of Euro Area quarterly variables. Although the introduction of the euro has changed the monetary transmission mechanism in the individual countries towards a more homogeneous response, we find that differences still remain between North and South Europe in terms of prices and unemployment. These results are the consequence of country‐specific structures, rather than of European Central Bank policies.

Suggested Citation

Barigozzi, Matteo and Barigozzi, Matteo and Barigozzi, Matteo and Conti, Antonio Maria and Luciani, Matteo, Do Euro Area Countries Respond Asymmetrically to the Common Monetary Policy? (October 2014). Oxford Bulletin of Economics and Statistics, Vol. 76, Issue 5, pp. 693-714, 2014, Available at SSRN: https://ssrn.com/abstract=2487586 or http://dx.doi.org/10.1111/obes.12038

Matteo Barigozzi (Contact Author)

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London School of Economics and Political Science ( email )

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University of Bologna ( email )

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Antonio Maria Conti

Banca d'Italia ( email )

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Matteo Luciani

Board of Governors of the Federal Reserve System ( email )

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