Monetary Policy Effects: New Evidence from the Italian Flow of Funds

Bonci, Riccardo; Columba, Francesco

doi:10.2139/ssrn.2120621

Cited by 24 publications

(4 citation statements)

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“…The results of Bonci () for the euro area are qualitatively similar to those for Portugal: after the shock, euro area households initially increase net funds borrowed by reducing the acquisition of financial assets by more than they decrease their liabilities (see Table ). By contrast, Bonci and Columba () find evidence that net funds borrowed by Italian households after a contractionary monetary policy shock decline as households issue less liabilities and acquire more financial assets. Finally, Christiano et al .…”

Section: The Effects Of Monetary Policy On Borrowing and Lending Actimentioning

confidence: 92%

“…Following Christiano et al . (); Bonci and Columba () and Bonci (), we pay particular attention to the variable ‘net funds raised’ by the different sectors, which corresponds to the difference between the issuance of financial liabilities and the acquisition of financial assets in a given period. This concept is linked to the Non‐financial Accounts since for each sector the difference between fixed investment and gross savings gives rise to a net financial position towards the rest of the economy (i.e.…”

Section: The Effects Of Monetary Policy On Borrowing and Lending Actimentioning

confidence: 99%

“…Previous studies using a similar methodology have been conducted for the US, Italy and the euro area (see Christiano et al ., ; Bonci and Columba, ; and Bonci, ). They analyse the effects of a monetary policy shock with a VAR model extended to include a range of flow of funds data.…”

Section: Introductionmentioning

confidence: 96%

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The Balance Sheet Channel in a Small Open Economy in a Monetary Union

Sousa

Gameiro

2012

Int. J Fin Econ

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This paper uses a two‐country VAR approach to study the transmission of monetary policy shocks in Portugal, focusing in particular on the financial decisions of households, corporations (financial/non‐financial), the government and the rest of the world. We find that a monetary policy shock has a contractionary effect on economic activity and increases the financing needs of households and non‐financial corporations. The financial sector plays an important role, supplying the necessary funds to these sectors and thus facilitating their adjustment to the shock. We do not find much evidence of a significant systematic behaviour of the government or the rest of the world in response to monetary policy shocks. Copyright © 2012 John Wiley & Sons, Ltd.

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Section: The Effects Of Monetary Policy On Borrowing and Lending Actimentioning

confidence: 92%

Section: The Effects Of Monetary Policy On Borrowing and Lending Actimentioning

confidence: 99%

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The Balance Sheet Channel in a Small Open Economy in a Monetary Union

Sousa

Gameiro

2012

Int. J Fin Econ

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“…For an alternative empirical framework, see Bonci and Columba (), who explore the sectoral response to monetary policy shocks in terms of net lending responses in the context of a recursive VAR model for Italy.…”

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confidence: 99%

External and Macroeconomic Adjustment in the Larger Euro‐Area Countries

Angelini

Zorzi²,

Aerssen³

2016

International Finance

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The paper is released in order to make the research of CompNet generally available, in preliminary form, to encourage comments and suggestions prior to final publication. The views expressed in the paper are the ones of the author(s) and do not necessarily reflect those of the ECB, the ESCB, and of other organisations associated with the Network. Terms of use: Documents in EconStor may AcknowledgementsWe are grateful for the insightful comments by L. Dedola, A. Dieppe, G. Kenny, G. Lombardo, M. Rubaszek, F. Smets as well as participants of ECB and ESCB seminars. The views expressed are those of the authors and do not necessarily reflect those of the ECB. Elena AngeliniEuropean Central Bank; e-mail: elena.angelini@ecb.europa.euMichele Ca' Zorzi European Central Bank; e-mail: michele.cazorzi@ecb.europa.eu Katrin ForsterEuropean Central Bank; e-mail: katrin.forster@ecb.europa.eu AbstractA balanced current account in the euro area has disguised sizeable net lending imbalances at the country level, exposing the common currency area to severe pressures during the …nancial crisis.The key contribution of this paper is to evaluate the adjustment process through the lenses of the New Multi Country Model at the country and sectoral level. We …nd that shocks to the external, …scal and monetary environment help explain, to a large degree, the sizable current account adjustment and rise in unemployment in Spain. The model also suggests that a recovery in wage competitiveness helps to reduce external de…cits at the cost of higher net borrowing by households. The stimulus e¤ects on aggregate demand, via the interest rate response of the common monetary authority and the competitiveness channel, are present but not overly large, as the rebound in economic activity depends mainly on global demand, supportive monetary policy, business and consumer con…dence.Key words: net lending, euro area countries, current account, modeling JEL Classi…cation: C5, F32, F41, O52. NON-TECHNICAL SUMMARYThe current account in the euro area has historically been close to balance. The presence of de…cits and surpluses across the di¤erent participating members was not generally perceived as a major policy issue, as e.g. the Spanish de…cit was o¤set by the German surplus (Williamson, 2007).The sizable net borrowing by the euro area public sector was instead o¤set by the net savings of the euro area private sector. Following the …nancial crisis the academic literature has moved from a largely beni...

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Housing and the Macroeconomy: The Italian Case

Bulligan

2010

Housing Markets in Europe

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Monetary Policy Effects: New Evidence from the Italian Flow of Funds

Cited by 24 publications

References 40 publications

The Balance Sheet Channel in a Small Open Economy in a Monetary Union

The Balance Sheet Channel in a Small Open Economy in a Monetary Union

External and Macroeconomic Adjustment in the Larger Euro‐Area Countries

Housing and the Macroeconomy: The Italian Case

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