Professor of Economics - London Business School
Money, credit, monetary policy and the business cycle in the euro area: what has changed since the crisis?
Reichlin, L., Giannone, D., Lenza, M.
Date Published: 18/06/2014
This paper provides VAR based evidence of the response of a large set of euro area macroeco- nomic and ﬁnancial variables to cyclical and monetary policy shocks. It then uses the model to analyze the stability of ﬁnancial intermediation after the 2008 crisis. Our key ﬁnding is that the cyclical dynamics of short-term interest rates, deposits and loans is not signiﬁcantly diﬀerent from that identiﬁed in the pre-crisis sample while long-term interest rates have been exceptionally high and long-term loans and deposits exceptionally low.
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