NDLI: The exchange rate and monetary conditions in the Euro area

Content Provider	Springer Nature Link
Author	Mayes, David G. Virén, Matti
Copyright Year	2000
Abstract	The Exchange Rate and Monetary Conditions in the Euro Area. — Using information from a variety of sources, this paper suggests that the exchange rate will play an important role in the transmission of the impact of monetary policy on the real economy and inflation in the euro area. As a first approximation it would be reasonable to assume that an increase in the real 90-day interest rate of 100 basis points would have the same effect on demand two years later as a 3.5 percent fall in the real euro exchange rate. This implies that the euro area will tend to behave like a large open economy rather than a closed economy and hence that it would be helpful in informing monetary policy to construct a Monetary Conditions Index (MCI).Der Wechselkurs und monetÄre Bedingungen im EuroRaum. — Der Verfasser benutzt Informationen aus einer Reihe von Quellen und kommt zu dem Ergebnis, dass der Wechselkurs bei der übertragung der geldpolitischen Impulse auf die reale Wirtschaft und Inflation im Euro-Raum eine bedeutende Rolle spielen wird. In erster AnnÄherung hÄlt er es für annehmbar zu vermuten, dass ein Anstieg des 90-Tage-Zinssatzes um 100 Basispunkte dieselbe Wirkung auf die Nachfrage in zwei Jahren haben dürfte wie ein 3,5-prozentiger Rückgang des Euro-Wechselkurses. Das deutet darauf hin, dass der Euro-Raum dahin tendiert, sich wie eine gro\e offene Volkswirtschaft und nicht wie eine geschlossene Volkswirtschaft zu verhalten, und dass es somit zur Information der geldpolitischen Instanzen hilfreich wÄre, einen Index der monetÄren Bedingungen (Monetary Conditions Index = MCI) zu entwickeln.
Starting Page	199
Ending Page	231
Page Count	33
File Format	PDF
ISSN	16102878
Journal	Weltwirtschaftliches Archiv
Volume Number	136
Issue Number	2
e-ISSN	16102886
Language	English
Publisher	Springer Berlin Heidelberg
Publisher Date	2000-06-01
Publisher Place	Berlin, Heidelberg
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	International Economics European Integration Macroeconomics/Monetary Economics//Financial Economics Economic Policy
Content Type	Text
Resource Type	Article
Subject	Economics, Econometrics and Finance

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4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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