Common directives, heterogeneous results. Why the crisis of the early 2000’s impacted the Euro members differently.

Details

Supervisors

Rychalovska, Yulia

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [120] en sciences économiques, orientation générale, à finalité spécialisée

Abstract

In this thesis, I studied and document the divergence of eight different EMU’s members with their needs in monetary policy represented by the Taylor’s rate. I also explained the factor behind these divergences and why they impact the transmission of the ECB’s monetary policy. I highlight the importance of divergence in monetary policy transmission, the degree of financial stress, the inflation expectation and other factors to explain the divergence in Taylor’s rate mong a sample of eight countries. Finally, I made suggestions on how to improve the resilience of the EMU toward asymmetric shock that may exacerbate these divergences based on the theory of the Optimal currency area.