Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/266408 
Year of Publication: 
2020
Citation: 
[Journal:] European Economic Review [ISSN:] 0014-2921 [Volume:] 122 [Article No.:] 103361 [Publisher:] Elsevier BV [Place:] Amsterdam [Year:] 2020
Publisher: 
Elsevier BV, Amsterdam
Abstract: 
We estimate the impact of monetary policy on structural reform adoption in the euro area. We identify exogenous ECB policy changes through an event study that extracts the unexpected variation in euro area interest rates on policy announcement days. We find that surprise monetary expansions increase the number of reforms significantly and that the effect is stronger for countries with weaker macroeconomic fundamentals or tighter public budget constraints. These findings are consistent with the hypothesis that expansionary monetary policy, by attenuating the short-run costs of reforms and increasing governments’ financial leeway, spurs competition‐friendly supply-side policy.
Subjects: 
Macroeconomic policy
Euro area
Event study
Panel data
JEL: 
C23
E52
E58
P11
Published Version’s DOI: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)

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