Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/228867
Authors: 
Destefanis, Sergio
Fragetta, Matteo
Gasteiger, Emanuel
Year of Publication: 
2021
Series/Report no.: 
ECON WPS No. 05/2019
Abstract: 
This paper examines whether Euro Area countries would have faced a more favorable inflation output variability tradeoff without the Euro. We provide evidence supporting this claim for the periods of the Great Recession and the Sovereign Debt Crisis. The deterioration of the tradeoff becomes insignificant only after Draghi's 'whatever it takes' announcement. Results show that the detrimental effect of the Euro is more severe for peripheral countries. We base our results on a novel empirical strategy that, consistently with monetary theory, models the joint determination of the variability of inflation and output conditional on structural supply and demand shocks.
Subjects: 
Euro Area
Monetary Policy
Difference-in-Differences
JEL: 
C32
E50
F45
Document Type: 
Working Paper

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