BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
Monetary transmission mechanism in Central and Eastern Europe: Gliding on a wind of change
(), Balázs Égert
() and Ronald MacDonald
Abstract: This paper surveys recent advances in empirical studies of
the monetary transmission mechanism (MTM), with special attention to
Central and Eastern Europe. In particular, while laying out the functioning
of the separate channels in the MTM, it explores possible interrelations
between different channels and their impact on prices and the real economy.
The empirical findings for Central and Eastern Europe are then briefly
compared with results for industrialized countries, especially for the euro
area. We highlight potential pitfalls in the literature and assess the
relative importance, and potential development, of the different channels,
emphasizing the relevant asymmetries between Central and Eastern European
countries and the euro area.
Keywords: monetary transmission; transition; Central and Eastern Europe; credit channel; interest rate channel; interest-rate pass-through; exchange rate channel; exchange rate pass-through; asset price channel; (follow links to similar papers)
JEL-Codes: E31; E51; E58; F31; O11; P20; (follow links to similar papers)
59 pages, August 14, 2006
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