How to Promote Growth in the Euro Area: The Contribution of Monetary Policy

Issing, Otmar

doi:10.1111/1468-2362.00054

Cited by 25 publications

(6 citation statements)

References 20 publications

(26 reference statements)

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“…3 See for evidence on real wage rigidity for instance Calmfors (2001) and Boeri et al (2001). Issing (2000) considers the evidence for nominal wage rigidity convincing. See also, for instance, Knoppik and Dittmar (2002) for an analysis of downward nominal wage rigidity in Germany by a variety of approaches.…”

Section: Rigidities and Adjustment Dynamics: Overheating And Overcoolingmentioning

confidence: 99%

Reviewing Adjustment Dynamics in EMU: From Overheating to Overcooling

2008

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This paper analyses how adjustment dynamics, in an environment with some degree of price and wage rigidity, may create and strengthen asymmetric developments in a monetary union. It presents a simple illustrative model of adjustment dynamics that reproduces quite nicely actual developments in the first years of EMU. The model is used to analyse adjustments to two types of shocks-relative competitiveness shifts and demand disturbances. It is shown that the interaction between real exchange rate adjustment and real interest rate developments may contribute to periods of overheating and overcooling during which output might be for a number of years either above or below potential. Furthermore, the paper looks at the circumstances in which smooth adjustment to shocks can be expected and, on the other hand, when a cycle with greater amplitude is more likely. Finally, the paper examines policy options that could improve the functioning of EMU. The analysis provides another strong argument for pressing ahead with reforms that increase flexibility in labour and product markets and further integrate the economies of the euro area.

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Section: Rigidities and Adjustment Dynamics: Overheating And Overcoolingmentioning

confidence: 99%

Reviewing Adjustment Dynamics in EMU: From Overheating to Overcooling

2008

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“…8 Due to this simple finding, central banks should pay close attention to the development of the money supply. 9 The relationship between money and output, however, belongs to one of the most disputed questions in macroeconomics (see Issing, 2000). There is only one consensus: In the long run no trade-off between inflation and unemployment exists (see Parkin, 1998).…”

Section: The Role Of Money and Its Leading Indicator Propertiesmentioning

confidence: 99%

European Monetary Policy: The Ongoing Debate on Conceptual Issues

Clausen

Donges

2001

World Economy

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“…These are discussed in more detail inIssing (2000b). For example, if labour supply is allowed to be endogenously determined, this means that changes in money growth have the potential to affect the relative marginal utilities of consumption and leisure and therefore the level of steadystate output.…”

mentioning

confidence: 99%

Why Price Stability?

Richter

2015

SSRN Journal

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How to Promote Growth in the Euro Area: The Contribution of Monetary Policy

Cited by 25 publications

References 20 publications

Reviewing Adjustment Dynamics in EMU: From Overheating to Overcooling

Reviewing Adjustment Dynamics in EMU: From Overheating to Overcooling

European Monetary Policy: The Ongoing Debate on Conceptual Issues

Why Price Stability?

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