Real Exchange Rates of Tradable and Non-tradable Goods in the European Monetary Union

The spatial spread of inflation and its consequences for real exchange rates (RER) between the members states of the European Monetary Union (EMU) is a topic of continuing empirical research. Lacking inflation convergence can cause serious problems in a monetary union. On one hand, diverging inflation rates between the member states of a currency union… Real Exchange Rates of Tradable and Non-tradable Goods in the European Monetary Union weiterlesen

Monetary Policy Number Crunching Update

ECB quantitative easing so far successful? As the latest discussion of monetary policy numbers here has shown, the monetary policy of the European Central Bank (ECB) has not been expansionary since the beginning of the Great Recession in the year 2008. In March 2015 however, the ECB has started a „quantative easing“ (QE) program following… Monetary Policy Number Crunching Update weiterlesen

After 6 years of economic slowdown: The European Central Bank finally prepares for expansionary monetary policy!

1. Policy failure of the ECB Measured by the deviation of actual GDP from its long-run trend, the economic slowdown in the European Monetary Union (EMU) has begun with the emergence of the Great Recession by the end of the year 2008. (Figure 1). Given this background, it is astonishing, that the monetary policy of… After 6 years of economic slowdown: The European Central Bank finally prepares for expansionary monetary policy! weiterlesen