Do Asymmetries Matter for European Monetary Policy?

Posted: 10 Dec 2001

See all articles by Yunus Aksoy

Yunus Aksoy

Birkbeck University of London

Paul De Grauwe

London School of Economics & Political Science (LSE); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Centre for Economic Policy Research (CEPR)

Hans Dewachter

Catholic University of Leuven (KUL) - Department of Economics; Erasmus Research Institute of Management (ERIM)

Abstract

In this paper we analyze the impact of economic and institutional (ECB decision rules) asymmetries on the effectiveness of monetary policy in Euroland. We consider a model where asymmetric shocks and divergent propagation of shocks in output and inflation are potential causes of tensions within the ECB concerning the conduct of common monetary (interest rate) policy. Welfare implications of the alternative decision procedures are discussed.

Keywords: EMU, linear feedback rules, monetary stability

JEL Classification: E52

Suggested Citation

Aksoy, Yunus and De Grauwe, Paul and Dewachter, Hans, Do Asymmetries Matter for European Monetary Policy?. European Economic Review, 46, pp. 443-469., Available at SSRN: https://ssrn.com/abstract=288935

Yunus Aksoy

Birkbeck University of London ( email )

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Paul De Grauwe (Contact Author)

London School of Economics & Political Science (LSE) ( email )

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CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Hans Dewachter

Catholic University of Leuven (KUL) - Department of Economics ( email )

Center for Economic Studies
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Belgium
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Erasmus Research Institute of Management (ERIM)

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