This paper uses a data-set including time series data on macroeconomic variables, loans, deposits and interest rates for the euro area in order to study the features of financial intermediation over the business cycle.
Is money's role relevant to describing the post-WWII U.S. macroeconomic dynamics? Has this relevance changed over time? These questions are answered using both fixed-coefficient and rolling-window Bayesian estimations of a structural model of the business cycle with money.
I estimate the dynamic effects of respectively traditional interest rate
innovations and unconventional monetary policy actions on the Euro area
economy. The results show that the Eurosystem can stimulate the economy
beyond the policy rate by increasing the size of its balance sheet. The ultimate
consequences on output and consumer prices are however more sluggish
