MACROECONOMIC AND FINANCIAL EFFECTS OF UNCONVENTIONAL MONETARY POLICIES IN THE EURO AREA

The aim of this article is to assess the macroeconomic and financial effects of unconventional monetary policies (UMPs) in the euro area. The analysis is based on a structural dynamic factor model estimated on a large panel of euro area monthly variables. This technique has the advantage of allowing to estimate the potentially heterogeneous transmission of a common UMP shock within individual countries. This paper shows that UMPs lower long-term rates, reduce lending rates, ease credit standards and boost credit demand. However, member states react asymmetrically to this common UMP shock. In addition, the effects of UMPs on activity are low and slow, especially in the countries most affected by the crisis.