Eurozone is going though the worst ever crises since the adoption of the common currency in 1999. In the aftermath of …

central banks' monetary policy must be credible if the authorities want to curb inflation. A second view is that central banks … set their monetary policy by using all the information relevant for inflation and output projections. In Europe, a … controversy has emerged about the role of monetary aggregates as useful indicators of future inflation and output. On one hand …

with regime shifts implying that the stance of reaction to the inflation-gap and output-gap has varied according to the … credit risk in the private and sovereign bond markets, the monetary base and past levels of inflation, output and the shocks … affecting the European economies. We provide evidence of regimes corresponding to low to high levels of inflation with the …

In this paper, we test two models of the Eurozone, with a special emphasis on the role of money and monetary policy …

and real money balances in the Eurozone. Our analysis suggests that risk aversion was a more important component of output …

. By using Bayesian estimation techniques, we shed light on the determinants of output and inflation, but also of the … inflation variability is essentially minor whatever the risk aversion level, the interest rate (monetary policy) being the …