The credibility of monetary policy announcements: Empirical evidence for OECD countries since the 1960s

Belke, Ansgar; Freytag, Andreas; Keil, Jonas; Schneider, Friedrich

doi:10.1016/j.iref.2014.05.005

International Review of Economics & Finance

2014

DOI: 10.1016/j.iref.2014.05.005

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The credibility of monetary policy announcements: Empirical evidence for OECD countries since the 1960s

Ansgar Belke

Andreas Freytag

Jonas Keil

et al.

Abstract: 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… Show more

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Cited by 9 publications

References 42 publications

(25 reference statements)

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A more effective euro area monetary policy than OMTs — gold-backed sovereign debt

Belke

2013

Intereconomics

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This paper argues that using gold as collateral for highly distressed bonds would bring great benefits to the euro area in terms of reduced financing costs and bridge-financing. It is mindful of the legal issues that this will raise and that such a suggestion will be highly controversial. However, a necessary condition is that the European System of Central Banks (ESCB) has agreed to the temporary transfer of the national central bank's gold to a debt agency in full independence. This debt agency passes the gold along, in strict compliance with the prohibition of monetary debt financing. The paper also explains that gold has been used as collateral in the past and how a gold-backed bond might work and how it could lower yields in the context of the euro crisis. This move is then compared to the ECB's now terminated Securities Market Programme (SMP) and its recently announced Outright Monetary Transactions (OMTs). Namely, a central bank using its balance sheet to lower yields of highly distressed countries where the monetary policy transmission mechanism is no longer working. Beyond some similarities between the moves, the specific benefits of using gold in this manner vis-a-vis the SMP and the OMTs are highlighted. For instance, there is by and large no transfer of credit risk between high risk/low risk countries, losses are borne by specific countries and not by the largest shareholders of the ECB, it would turn out to be more transparent, it would not be inflationary and would foster reforms. JEL-Classification: E52, E58, E61, F33

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A more effective euro area monetary policy than OMTs — gold-backed sovereign debt

Belke

2013

Intereconomics

Self Cite

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Addressing policy credibility problems for low-carbon investment

Nemet

Jakob

Steckel

et al. 2017

Global Environmental Change

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Common macroeconomic shocks and business cycle fluctuations in Euro area countries

Cavallo

Ribba

2015

International Review of Economics & Finance

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This paper investigates the dynamic effects of common macroeconomic shocks in shaping business cycle fluctuations in a group of Euro-area countries. In particular, by using the structural (near) VAR methodology, we investigate the effect of area-wide shocks, with particular attention to monetary policy shocks. The main conclusion is that: (a) contractionary monetary policy shocks cause similar recessionary effects in all countries; (b) as far as business cycle fluctuations are concerned, there is a separation into two distinct groups of countries, with a first group including the biggest European economies in which business cycle fluctuations are mainly explained by common, area-wide shocks and a second one, including Greece, Ireland and Portugal, in which the national shocks play, instead, a much greater role.

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The credibility of monetary policy announcements: Empirical evidence for OECD countries since the 1960s

Cited by 9 publications

References 42 publications

A more effective euro area monetary policy than OMTs — gold-backed sovereign debt

A more effective euro area monetary policy than OMTs — gold-backed sovereign debt

Addressing policy credibility problems for low-carbon investment

Common macroeconomic shocks and business cycle fluctuations in Euro area countries

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