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Monetary policy in the euro area - has it become more powerful on the road to EMU?

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  • Christian Melzer
  • Thorsten Neumann

Abstract

This article provides new evidence on the effects of monetary policy in the euro area. With the help of a time-varying coefficient vector autoregressive model we find that monetary policy shocks have had a greater impact on real output since the mid-1980s and that their transmission has become faster. Our findings indicate a change in the monetary transmission mechanism that can be explained by the changes in the European financial system over the last 20 years.

Suggested Citation

  • Christian Melzer & Thorsten Neumann, 2009. "Monetary policy in the euro area - has it become more powerful on the road to EMU?," Applied Economics Letters, Taylor & Francis Journals, vol. 16(18), pages 1801-1804.
    • Handle: RePEc:taf:apeclt:v:16:y:2009:i:18:p:1801-1804
    DOI: 10.1080/13504850701719538
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    References listed on IDEAS

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