Asymmetric monetary transmission in Europe : European and Transatlantic Studies
Investigates the importance of asymmetries in the monetary transmission process across EMU member countries. Provides a systematic account of individual channels of monetary transmission and assesses their importance as a source of asymmetric monetary transmission in Europe. Explores the role of forward-looking financial markets--in particular, the role of interest rates, the exchange rate, and stock prices--in the monetary transmission process; the implications of a differential interest elasticity of aggregate demand across member countries; whether aggregate European money demand can be considered stable even if the national money demand functions differ; the role of asymmetric degrees of openness across member countries of a monetary union; and whether the presence of supply-side asymmetries, particularly differences in wage/price mechanisms across European economies, could lead to qualitative cyclical differences in the response to common monetary policy. Reviews empirical evidence on asymmetries in the overall effects of monetary policy in Europe. Considers structural changes in the financial sector and in the goods and labor markets after the establishment of EMU that are likely to affect the degree of asymmetric monetary transmission in Europe. Discusses implications for the conduct of monetary policy by the European Central Bank. Revised and updated version of the author's thesis accepted by the Faculty of Economic and Business Administration at the University of Kiel in 1999. Clausen is Visiting Assistant Professor at the Kelley School of Business, Indiana University. Bibliography; no index.
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