Does global liquidity matter for monetary policy in the euro area?

Does global liquidity matter for monetary policy in the euro area? / prepared by Helge Berger and Thomas Harjes.

Global excess liquidity is sometimes believed to limit sovereign monetary policy even in large economies, including the euro area. There is much discussion about what constitutes global excess liquidity and our approach adjusts liquidity for longer-term interest rate and output effects. We find that...

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Bibliographic Details
Main Authors: Berger, Helge (Author), Harjes, Thomas, 1969- (Author)
Format: eBook
Language:English
Published: [Washington, D.C.] : International Monetary Fund, ©2009.
Series:IMF working paper ; WP/09/17.
Subjects:
Liquidity (Economics)
Monetary policy > Europe.
Monetary policy
Europe
Online Access:Click for online access
Description
Summary:Global excess liquidity is sometimes believed to limit sovereign monetary policy even in large economies, including the euro area. There is much discussion about what constitutes global excess liquidity and our approach adjusts liquidity for longer-term interest rate and output effects. We find that especially excess liquidity in the U.S. leads developments in euro area liquidity. U.S. excess liquidity also enters consistently positive as a determinant of euro area inflation. There is some evidence that this result may be related to a weakening of the effectiveness of monetary policy in the euro area during times of excessive U.S. liquidity.
Physical Description:1 online resource (24 pages) : color illustrations
Bibliography:Includes bibliographical references (pages 21-23).
ISBN:9781452744025
1452744025
1462391095
9781462391097
1451871643
9781451871647
1282842390
9781282842397
9786612842399
6612842393
Language:English.
Source of Description, Etc. Note:Print version record.

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