Research On The Global Financial Crisis The Euro Area Monetary Policy Transmission Mechanism And Regional Effects

The paper studies the monetary policy transmission mechanism in eurozone against the background of global financial crisis and European sovereignty debt crisis. It focuses on the changes of monetary policy transmission mechanism as well as transmission effects before and after the crisis by adopting a combination of qualitative and quantitative analysis methods. Firstly, the paper studies the strategic goals of ECB monetary policy and specific monetary policy measures. Based on the study above, the paper elaborates the implementation of these measures in details. Then, the paper concentrates on monetary policy transmission mechanism, pointing out that interest rate transmission channel and banks play an important role in eurozone monetary policy transmission mechanism and finding out that regarding the eurozone as a whole, transmission efficiency from policy interest rates to banking interests rates after financial crisis has decreased compared with that before crisis.Besides, the paper adopts the method of vector autoregressive model (VAR), selects12representative eurozone countries, and establishes two groups of VAR models with interest rate, GDP, HICP or money supply, GDP, HICP as variables respectively. Then, the influences on GDP and HICP from interest rate shock or from money supply shock have been studied respectively through the analysis of impulse response function. By horizontal comparison among countries and longitudinal comparison, it points out that regional asymmetric effects of monetary policy transmission exist in eurozone and the differences have been expanded after the outbreak of the financial crisis.Finally, the paper studies the main reasons for the block of eurozone monetary policy transmission mechanism and its regional asymmetric effects, pointing out that national differences in economic developments and fragmented fiscal policies are the main reasons. Then, the paper puts forward solutions to optimize eurozone monetary policy transmission mechanism, namely the outright monetary transaction as short-term countermeasures and institutional innovation and reform such as banking alliance and fiscal union as medium-term and long-term countermeasures.