Comparing conventional and unconventional monetary policy effects in the euro area and the United States
Ballabriga, Fernando (Universitat Ramon Llull. Departament d'Economia, Finances i Comptabilitat)
Davtyan, Karen (Universitat Autònoma de Barcelona. Departament d'Economia Aplicada)

Date:	2025
Abstract:	We use a consistent framework to compare the macroeconomic effects of conventional and unconventional monetary policy in the euro area (EA) and the United States (US). We find that monetary policy has a stronger effect on prices for the conventional policy period. We interpret this result by the lower level of the natural rate of interest during the unconventional policy period. At the same time, the effects of monetary policy on the unemployment rate and financial variables are more comparable between the conventional and the unconventional policy periods. We also find that the effectiveness of unconventional monetary policy in terms of its target impact is lower in the EA than in the US, a result we attribute to differences in central bank institutional design.
Grants:	Agencia Estatal de Investigación PID2022-136482OB-I00
Note:	Altres ajuts: acords transformatius de la UAB
Rights:	Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, la comunicació pública de l'obra i la creació d'obres derivades, fins i tot amb finalitats comercials, sempre i quan es reconegui l'autoria de l'obra original.
Language:	Anglès
Document:	Article ; recerca ; Versió publicada
Subject:	Conventional monetary policy ; Unconventional monetary policy ; Zero lower bound ; Natural interest rate ; Institutional differences
Published in:	Journal of International Financial Markets, Institutions and Money, Vol. 104 (October 2025) , art. 102203, ISSN 1873-0612

DOI: 10.1016/j.intfin.2025.102203

29 p, 5.7 MB

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