We would like to invite you to the Empirical Seminar series organized by the Institute of Economic Research, Slovak Academy of Sciences, Šancová 56 that will be held in hybrid form (online and at the library of the Institute of Economic Research, Slovak Academy of Sciences). The seminar will take place on October 5th, 2026 at 10.00 (CET).
The speaker will be Miklós Váry (Corvinus University of Budapest, Hungary).
The topic of the seminar is: Monetary Policy Effectiveness across Euro Area Countries: A Bayesian Vector Autoregressive Analysis
Authors: Erneszt Kazmin, Miklós Váry
Abstract:
This paper revisits the question of how heterogeneously the European Central Bank’s (ECB’s) monetary policy shocks transmit to the economies of individual Euro Area (EA) member states. Compared to earlier studies, it makes use of a longer sample, thereby utilizing data from more member states and from time periods, when the zero lower bound on the policy rate was binding. The series of common structural monetary policy shocks is identified using a sign-restricted Bayesian vector autoregressive (BVAR) model. Then, it is used as an instrument in country-specific BVARs to estimate member states’ output and price level responses to the same shocks. The ECB’s monetary policy is found to be typically more effective in influencing the economic activities of more developed countries than those of less developed ones. However, most of these cross-country differences are not found to be significant statistically. Even less cross-country heterogeneity is revealed in terms of price level effects. All this implies that cross-country asymmetries in the monetary transmission mechanism are not likely to prevent the ECB from designing a common monetary policy that is optimal for the individual Euro Area member states, as well as the monetary union as a whole. Suboptimalities may still arise from asymmetric shocks hitting the member countries.
The seminar will be co-chaired by Filip Ostrihoň.
Link:
In-person bilateral meetings with the speaker will be possible after the seminar. If you are interested,
please book a specific time slot using the following link:
https://doodle.com/sign-up-sheet/participate/d626c9c3-0854-47f9-bffe-c7eb683e9c4c/select