Favero, Carlo A.; Giavazzi, Francesco - C.E.P.R. Discussion Papers - 2008
(ECB) to study optimal monetary policy in the Euro area (for instance Smets and Wouters, 2004a, 2004b) typically assume … fluctuations and their international comovements. This paper studies monetary policy in the Euro area looking at the variable most … inconsistent with the empirical evidence on the determinants of Euro area long-term rates. It is also inconsistent with the way the …