IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-0-230-00614-0_5.html
   My bibliography  Save this book chapter

Output and prices in a world without the real balance effect

In: The Interaction of Monetary Policy and Wage Bargaining in the European Monetary Union

Author

Listed:
  • Sebastian Dullien

    (Financial Times Deutschland)

Abstract

As has been shown in Chapter 4, one can conclude that monetary policy in the euro-area works primarily through the interest rate channel on aggregate investment. By changing the short-term interest rate, the ECB changes yields on other financial instruments, which in turn change the interest rate that firms have to pay for financing their investment. Depending on the demand conditions they face, they will decide which of their potential investment projects looks sufficiently promising and will conduct the investments necessary for these projects. The lower the interest rates, the more projects promise profit, given certain fixed demand conditions, thus the higher the aggregate investment.

Suggested Citation

  • Sebastian Dullien, 2004. "Output and prices in a world without the real balance effect," Palgrave Macmillan Books, in: The Interaction of Monetary Policy and Wage Bargaining in the European Monetary Union, chapter 5, pages 97-148, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-00614-0_5
    DOI: 10.1057/9780230006140_5
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-0-230-00614-0_5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.