A VAR Model for the Analysis of the Effects of Monetary Policy in the Euro Area

This paper, by the estimation of a structural VAR model on aggregate data from 1980 to 2002, examines the macroeconomic effects of an unexpected change in monetary policy on the euro area. The results are in line with the economic theory and they are close to the one estimated by other authors. These results, considering the formation of the European Monetary Union, give rise to some doubts and require some considerations. Thus, this paper discusses the limits of both the econometric technique used, and the data compilation methodology usually applied in these works.