Transmission of U.S. monetary policy to Europe and asymmetry in the European monetary system

Leader of the pack? German monetary dominance in Europe prior to EMU

“…His results suggest that the monetary policy decisions of all EMS member countries were driven to a large extent by the interest rate policy of the German Bundesbank. Artus et al (1991) also corroborate the asymmetrical functioning of the EMS and the dependence of ERM countries on German short-term interest rates. 4 Fratzscher (2002) augments the cointegration analysis employed by Edison and MacDonald with a GARCH model to account for possible conditional heteroskedasticity in interest rate data at the daily frequency.…”

Euro area inflation persistence

“…Around this time the policy of 'encadrement du credit' was de facto abandoned, and a gradual move away from the policy of a weak Franc started. So this date can be taken to mark, approximately, Banque de France's abjuration of its accommodating attitude towards inflation (see Artus, Avouyi-Dovi, Blenze and Lecointe (1991), and more recently, Mojon (1997Mojon ( , 1999 and CGG (1998)). 24 Finally, for Germany I partition the sample into 1970 Q1-1986Q4 and 1987Q1-2000Q4.…”

European and international asymmetry in the volatility transmission mechanism: the “German Dominance Hypothesis” revisited

“…Specifically, Artus et al (1991), Katsimbris and Miller (1993), and Kirchgaessner and Wolters (1993) favor unidirectional causality linkages between US and several European countries' interest rates, while Hassapis et al (1999) report bidirectional linkages from the US to the EMS countries. Uctum (1999) finds some support for the evidence in this paper in that US and European short-term interest rate linkages during the 1990s broke down completely.…”

“…In particular, they find that although Germany influences some members' short-term interest rates significantly, like those of France and the Netherlands, other countries' rates reveal a much smaller impact from German interest rates. Other studies, by contrast, found an overwhelming role of Germany in the conduct of monetary policy (e.g., Artus, Avouyi-Dovi, Bleuse, & Lecointe, 1991;Gebauer, Mueller, Schmidt, Thiel, & Worms, 1994;Karfakis & Moschos, 1990;Katsimbris & Miller, 1993;Weber, 1991). These authors concluded that Germany played a pivotal role within EMS in setting, unidirectionally, the system's monetary policy.…”