This paper contributes to the literature measuring the response of stock markets to monetary policy actions. We analyse the reaction of European stock market returns to unexpected interest rate decisions by the European Central Bank (ECB). Endogeneity between interest rate changes and stock...

This paper investigates how money markets in the USA, Germany (up to 1998) and the euro area (since 1999) react to monetary policy announcements by the Federal Reserve, Bundesbank and ECB. We find that interest rates respond strongly to domestic monetary policy throughout, whereas the response...