A flurry of recent articles has argued on the basis of constructed European widemonetary aggregates that the demand for EURO's will be more stable than thecurrent demand for national currencies. In policy circles this seeminglymoderating effect of monetary integration figures as an additional...

There is a widely held view that existing differences in the capital and moneymarket structures across EMU countries are an important matter of concern forthe ECB, because they might hinder the uniform transmission of monetary policyactions. We argue that many aspects of financial structure are...

This paper investigates the demand for euros using panel data for 10 euro area countries covering the period from 1999 to 2008. Monetary aggregates are constructed to ensure that money is a national concept by excluding deposits owned by non-residents and including external deposits owned by...

This paper provides empirical evidence on the link between stock market volatility and macroeconomic uncertainty. We show that US stock market volatility is significantly related to the dispersion in economic forecasts from SPF survey participants over the period from 1969 to 1996. This link is...

Since long the auto industry has been a valued source of leading business cycle indicators. While practitioners continue to use data on new car registrations to forecast economic activity, the predictive performance of auto industry related stock returns has deteriorated in the past decades. For...

Index-linked bonds (ILBs) constitute a small but growing segment of the eurozone bond market. Issuers of index-linked bonds face a choice between linking to either a eurozone or a national price index. This paper examines this choice both theoretically and empirically and ends up with the...

A widely held notion holds that freely floating exchange rates are excessively volatile when judged against fundamentals and when moving from fixed to floating exchange rates. We re-examine the data and conclude that the disparity between the fundamentals and exchange rate volatility is more...

This paper uses a simple model of optimal monetary policy to consider whether the influence of national output and inflation rates on ECB interest rate setting should equal a country's weight in the eurozone economy. The findings depend on assumptions regarding interest rate elasticities,...

This paper employs a time-varying parameter state space model to explore the impact of the crisis on bank retail rates in the euro area. We show that σ-convergence in interest rates has been adversely affected by the crisis and quantify the role of sovereign and credit risk as two alternative...

This paper presents evidence on the industry effects of bank lending in Germany and identifies the industry effects of bank lending associated with changes in monetary policy and industryspecific bank credit demand. To this end, we estimate individual bank lending functions for 13 manufacturing...