Monetary Policy, the Composition of GDP, and Crisis Duration in Europe

Nicolas Cachanosky and Andreas Hoffmann

ICER Working Papers from ICER - International Centre for Economic Research

Abstract: This paper analyzes the effects of changes in interest rates on the composition of production in ten European countries during the boom period of the 2000s. We find that output elasticity differs across industries and across countries for similar industries. The paper suggests that in the run-up to the 2008 crisis, the ECB’s low interest rate policy affected the allocation of resources across industries. This may explain the sluggish overall recovery from the crisis in Europe.

Keywords: Monetary Policy; Interest Rate Sensitivity; Crisis Duration; GDP Composition (search for similar items in EconPapers)
JEL-codes: E32 E52 E58 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2014-10
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac and nep-mon
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Journal Article: Monetary Policy, the Composition of GDP and Crisis Duration in Europe (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:icr:wpicer:08-2014

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