International monetary spillovers
: the role of inflation

  • Alexandre Branco (Student)

Student thesis: Master's Thesis

Abstract

The recent years have been marked by a profound integration in both trade and financial markets across Europe that contributed to a spread from the Euro Area's monetary policy decisions far beyond its borders. This paper aims to delve into the intricate subject of monetary policy spillovers, focusing on the dynamic relationship between the Euro area's monetary policy and its impact on European nations that have chosen not to adopt the Euro as the common currency. A complex environment has been created where monetary policies set by the European Central Bank (ECB) radiate across borders, influencing economic variables and shaping policy landscapes. By the time of the financial and Eurozone crisis, the expansionary policies implemented by the ECB brought a cascade of effects, prompting policymakers in non-Euro area countries to navigate through challenges and opportunities posed by these spillovers. Small open economies, particularly those in Central and Eastern Europe, began a journey of economic and financial integration with the euro area after they agreed to join the European Union (E.U.). However, the vulnerability of these nations to spillover effects extends beyond eastern and central European countries; even Western and Northern European countries find themselves deeply involved in the Euro area's economic dynamics. Whether through pegged currencies or recent integration into the European Union, the impacts are profound, and inflation is a crucial factor.
Date of Award23 Jan 2024
Original languageEnglish
Awarding Institution
  • Universidade Católica Portuguesa
SupervisorDiana Bonfim (Supervisor)

Keywords

  • Monetary policy
  • Common currency
  • Spillovers
  • Integration
  • Inflation

Designation

  • Mestrado em Finanças

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