Bulletin n. 3/2010
January 2011
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
    • Fève Patrick, Matheron Julien, Sahuc Jean-Guillaume
    Inflation Target Shocks and Monetary Policy Inertia in the Euro Area
    in Economic Journal , Volume 120, Issue 547, September 2010 ,  2010 ,  1100-1124
    The euro area as a whole has experienced a marked downward trend in inflation over the past decades and, concomitantly, a protracted period of depressed activity. Can permanent and gradual shifts in monetary policy be held responsible for these dynamics? To answer this question, we embed serially correlated changes in the inflation target into a DSGE model with real and nominal frictions. The formal Bayesian estimation of the model suggests that gradual changes in the inflation target have played a major role in the euro area business cycle. Counter-factual exercises show that, had monetary policy implemented its new inflation objective at a faster rate, the euro zone would have experienced more sustained growth than it actually did.
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