Differences in the Monetary Policy Transmission Mechanism within the European Monetary Union: Germany and Italy

Inhaltsverzeichnis (Table of Contents)

• I. INTRODUCTION.
  • I.2 STRUCTURE
• II. TRANSMISSION MECHANISM
  • II.1 ENDOGENOUS MONEY AND THE CREDIT MARKET.
  • II.2 THE BASIC APPROACHES
  • II.3 THE IS-LM-MODEL AND THE INTEREST RATE STRUCTURE
  • II.4 INTEREST-RATE CHANNELS
  • II.5 CREDIT CHANNELS.
    • II.5.1 Bank-Lending Channel..
    • II.5.2 Balance Sheet Channel....
  • II.6 EXCHANGE RATE CHANNELS
  • II.7 EQUITY PRICE CHANNELS
  • II.8 EXPECTATIONS.
• III. THE ECB AND THE MONETARY UNION.
  • III.1 THE CURRENCY AREA...
  • III.2 MONETARY POLICY INSTRUMENTS OF THE EUROSYSTEM ...
  • III.3 RISKS AND CAUSES OF ASYMMETRIC TRANSMISSION.
• IV. THE TRANSMISSION MECHANISMS OF THE EUROPEAN MONETARY UNION...
  • IV.1 EURO AREA IN THE AGGREGATE
  • IV.2 ASPECTS OF MONETARY TRANSMISSION IN ITALY
    • IV.2.1 Banking sector.
    • IV.2.2 Investment and production.
    • IV.2.3 Inflation......
  • IV.3 ASPECTS OF MONETARY TRANSMISSION IN GERMANY.
    • IV.3.1 Banking sector.
    • IV.3.2 Investment and production
    • IV.3.3 Inflation
  • IV.4 CONVERGENCE PERSPECTIVES.
    • IV.4.1 Financial sector.
    • IV.4.2. Real sector.
• V. CONCLUSION

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

The objective of this paper is to investigate the asymmetric transmission of monetary policy within the Euro-area. The paper analyzes the characteristics of transmission channels in EMU countries, examines different stages of transmission where asymmetry or convergence may occur, and explores future perspectives for European transmission mechanisms.

• Asymmetric transmission of monetary policy in the Euro-area
• Characteristics of transmission channels in EMU countries
• Different stages of transmission and potential for asymmetry or convergence
• Future perspectives for European transmission mechanisms
• Potential drawbacks for participating economies and the impact of the Euro on European integration

Zusammenfassung der Kapitel (Chapter Summaries)

The first chapter provides an overview of current perspectives on transmission channels, discussing the transmission process in general, different stages of transmission, the IS-LM model, various interest rates, endogenous money, and the non-neutrality of money. The second chapter introduces the institutional framework of the European Monetary Union (EMU), connecting theoretical concepts to the main part of the paper. This section outlines the characteristics of EMU as a currency area, the framework of the Eurosystem, and the causes and risks of asymmetric transmission. The third chapter examines the differences in the transmission mechanism in practice, starting with the transmission mechanism of the aggregate Euro-area economy. This chapter also includes a detailed analysis of selected aspects of monetary transmission in Italy and Germany, focusing on the financial and real sectors as examples of the intermediate and final stages of transmission. The final section outlines future perspectives for monetary transmission in Europe, providing an up-to-date insight into the topic and current discussions.

Schlüsselwörter (Keywords)

Key terms and concepts central to this paper include: monetary policy transmission, asymmetric transmission, European Monetary Union (EMU), Eurosystem, currency area, interest rate channels, credit channels, exchange rate channels, equity price channels, expectations, convergence, financial sector, real sector, banking sector, investment, production, inflation.