Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/180839
Authors: 
Ademmer, Martin
Jannsen, Nils
Year of Publication: 
2018
Citation: 
[Journal:] Applied Economics [ISSN:] 0003-6846 [Volume:] 50 [Issue:] 34-35 [Pages:] 3787–3797
Abstract: 
Business investment in the euro area strongly declined during the Global Financial Crisis and the Sovereign Debt Crisis. It has not yet rebounded to its pre-crisis trend despite the very expansionary monetary policy measures of the ECB. We analyse the sluggish recovery in business investment in the euro area and the role of monetary policy in three steps. We investigate the main factors that have impeded business investment since the Global Financial Crisis. We empirically analyse how business investment has developed compared to typical patterns during other financial crises. Based on these results, we then discuss how effective monetary policy has been in stimulating business investment since the Global Financial Crisis. We conclude that business investment in the euro area has developed broadly in line with typical post-crisis patterns. Monetary policy significantly contributed to stabilize business investment at the beginning of the crises. In the aftermath of the crises, however, there seems to be little scope for monetary policy to further stimulate investment.
Subjects: 
business investment
crisis
monetary policy
local projections
JEL: 
E22
E32
E52
C32
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Article
Document Version: 
Published Version
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