IDEAS home Printed from https://ideas.repec.org/p/tin/wpaper/19990021.html
   My bibliography  Save this paper

Endogenous Financial Structure and the Transmission of ECB Policy

Author

Listed:
  • Ivo J.M. Arnold

    (Nijenrode University)

  • Casper G. de Vries

    (Erasmus University Rotterdam and NIAS)

Abstract

There is a widely held view that existing differences in the capital and moneymarket structures across EMU countries are an important matter of concern forthe ECB, because they might hinder the uniform transmission of monetary policyactions. We argue that many aspects of financial structure are endogenous to themonetary policy regime in place. It is shown that capital market structures areheavily correlated with past inflation and inflation uncertainty.Since the EURO regime imposes a unified monetary policy, we suspect that thedifferences will wither. A single currency, a single money market rate and a uniformreserve requirement will rapidly harmonize the money markets. In sum, wepredict that differential responses in the transmission of monetary policy actionsthrough the money and capital markets are of minor concern for theECB.

Suggested Citation

  • Ivo J.M. Arnold & Casper G. de Vries, 1999. "Endogenous Financial Structure and the Transmission of ECB Policy," Tinbergen Institute Discussion Papers 99-021/2, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:19990021
    as

    Download full text from publisher

    File URL: https://papers.tinbergen.nl/99021.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nikolay Hristov & Oliver Hülsewig & Timo Wollmershäuser, 2014. "Financial Frictions and Inflation Differentials in a Monetary Union," Manchester School, University of Manchester, vol. 82(5), pages 549-595, September.
    2. Mojon, Benoît, 2000. "Financial structure and the interest rate channel of ECB monetary policy," Working Paper Series 40, European Central Bank.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:tin:wpaper:19990021. 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: Tinbergen Office +31 (0)10-4088900 (email available below). General contact details of provider: https://edirc.repec.org/data/tinbenl.html .

    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.