Has monetary policy really become less effective in the euro area? A note |
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| Authors: | David Finck |
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| Institution: | Chair of Monetary Economics, Justus-Liebig-University Gie?en, Germany |
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| Abstract: | This paper applies a time-varying VAR model with stochastic volatility to the euro area. In contrast to the literature, we find that (i) monetary policy has not become less effective and that (ii) the expansionary policy that is currently pursued would not have resulted in a less severe recession in 2009. |
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| Keywords: | Bayesian TVP-VAR non-systematic monetary policy |
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