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http://hdl.handle.net/10419/28081
  
Title:The ECB's monetary analysis revisited PDF Logo
Authors:Berger, Helge
Harjes, Thomas
Stavrev, Emil
Issue Date:2008
Series/Report no.:Diskussionsbeiträge des Fachbereichs Wirtschaftswissenschaft der Freien Universität Berlin 2008/14
Abstract:Monetary aggregates continue to play an important role in the ECB's policy strategy. This paper revisits the case for money, surveying the ongoing theoretical and empirical debate. The key conclusion is that an exclusive focus on non-monetary factors alone may leave the ECB with an incomplete picture of the economy. However, treating monetary factors as a separate matter is a second-best solution. Instead, a general-equilibrium inspired analytical framework that merges the economic and monetary pillars” of the ECB's policy strategy appears the most promising way forward. The role played by monetary aggregates in such unified framework may be rather limited. However, an integrated framework would facilitate the presentation of policy decisions by providing a clearer narrative of the relative role of money in the interaction with other economic and financial sector variables, including asset prices, and their impact on consumer prices.
Subjects:ECB
monetary analysis
monetary pillar
New Keynesian model
DSGE model
P* model
Twopillar Phillips curve
VAR model
generalized dynamic factor model
JEL:C11
C30
E31
E40
ISBN:393836985X
Document Type:Working Paper
Appears in Collections:Diskussionsbeiträge, FB Wirtschaftswissenschaft, FU Berlin

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