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    The impact of conventional and unconventional monetary policy on expectations and sentiment

    Galariotis, E. and Makrychoriti, Panagiota and Spyros, S. (2018) The impact of conventional and unconventional monetary policy on expectations and sentiment. Journal of Banking & Finance 86 , pp. 1-20. ISSN 0378-4266.

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    This paper offers, evidence on the effect of ECB’s conventional and unconventional monetary policy on economic expectations in Euro-area countries during the US and EU crisis. We employ a range of research methodologies in a sample of nine Eurozone countries and combine expectations/sentiment indicators with a set of macroeconomic and financial variables. We find that ECB’s conventional monetary policy (and Fed’s monetary policy stance) has a positive and significant effect on economic expectations for Core Eurozone countries and a weak effect on Peripheral Eurozone countries. ECB’s unconventional policy measures, however, have a negative effect on Core countries’ economic expectations. This result is robust to different methodologies (PVAR, QVAR, FAVAR) and different datasets. Overall, our findings highlight the importance of monetary policy in the determination of economic expectations.


    Item Type: Article
    Keyword(s) / Subject(s): Unconventional monetary policy, Sentiment, Economic expectations
    School: Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
    Depositing User: Panagiota Makrychoriti
    Date Deposited: 18 Feb 2019 13:44
    Last Modified: 02 Aug 2023 17:48


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