The long-run relationship between money and prices in the euro area embedded in traditional money demand models with income and interest rates broke down after 2001. We develop an money demand model where investors hold a diversified portfolio with money, domestic and foreign stocks and...

By employing Lucas' (1982) model, this study proposes an arbitrage relationship - the Uncovered Equity Return Parity (URP) condition - to explain the dynamics of exchange rates. When expected equity returns in a country/region are lower than expected equity returns in another country/region, the...

Using a representative sample of businesses in the euro area, we show that Eurosystem purchases of corporate bonds under the Corporate Sector Purchase programme (CSPP) increased the net issuance of debt securities, triggering a shift in bank loan supply in favour of firms that do not have access...