Can the central bank of a monetary union, whose objectives are exclusively defined in terms of union-wide variables, improve its performance by reacting to regional variables rather than to union-wide variables only? Our answer is not clear-cut. We find the improvement to be large when we use a...

Using daily data for the euro area, the paper estimates demand equations for reserves held by commercial banks at the central bank. The presence of the expected overnight rate among the regressors allows to gauge the announcement effect, the ability by the central bank to influence the current...

The introduction of the euro notes and coins in the first two months of 2002 was followed by a lively debate on the alleged inflationary effects of the new currency. In Italy, as in the rest of the euro area, survey-based measures signaled a much sharper rise in inflation than measured by the...