scholarly journals The Impact of Monetary Policies on the Sustainable Economic and Financial Development in the Euro Area Countries

2020 ◽  
Vol 12 (22) ◽  
pp. 9367
Author(s):  
Dana Kiseľáková ◽  
Paulina Filip ◽  
Erika Onuferová ◽  
Tomáš Valentiny
Keyword(s):  
Financial Markets ◽  
Financial Development ◽  
Euro Area ◽  
Quantitative Easing ◽  
Government Bond ◽  
Bond Yields ◽  
Monetary Policies ◽  
Goods And Services ◽  
European Central ◽  
The Impact

One of the responses of the monetary policies of central banks to the sustainable development on financial markets, which also affected other markets and economic growth, is the role of non-standard monetary policies, referred to as quantitative easing in the form of Asset Purchase Programme. In this paper, the following main research problem was addressed: How can the Asset Purchase Programme help the European Central Bank fulfill its mandate of supervising the financial stability and financial development? Based on this, we formulated the main objective: to identify the impact of monetary policies on the dynamics of financial markets development, labor markets, and the markets for goods and services. As part of the applied methodology, the impact of the quantitative easing on the government bond yields curve was based on an indirect assessment using the seemingly unrelated regression model, considering the use of parameters from the functional benchmark form. Through the vector error correction model, another additional impact of the application of the monetary policy mechanisms on selected indicators of the considered markets was identified. The relationship between financial markets and economic growth was determined on the basis of the two-stage least square model using endogeneity control instruments. Applying the changes identified by the above models allowed us to determine the expected change in the rate of growth of the aggregate output of the euro area countries. Based on our results, we found out that Asset Purchase Programme had an impact on the growth of government bond yields issued by euro area countries, on lowering the risk rate on corporate bond markets, and increasing the nominal value of shares. In addition, growth in inflation and a decline in interest rates were affected. Finally, the European Central Bank (ECB)’s non-standard monetary policies have positively affected and stimulated the labor market and development in goods and services markets, referred to the sustainable financial development.

Country-specific euro area government bond yield reactions to ECB’s non-standard monetary policy program announcements

2020 ◽  
Vol 21 (4) ◽  
pp. 417-474 ◽  
Author(s):  
Ralf Fendel ◽  
Frederik Neugebauer
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Yield Reduction ◽  
Government Bond ◽  
Bond Yields ◽  
Bond Yield ◽  
Current Spread ◽  
Policy Program ◽  
Government Bond Markets ◽  
Country Specific

AbstractThis paper employs event study methods to evaluate the effects of ECB’s non-standard monetary policy program announcements on 10-year government bond yields of 11 euro area member states. Measurable effects of announcements arise with a one-day delay meaning that government bond markets take some time to react to ECB announcements. The country-specific extent of yield reduction seems inversely related to the solvency rating of the corresponding countries. The spread between core and periphery countries reduces because of a stronger decrease in the latter. This result is confirmed by letting the announcement variable interact with the current spread level.

A Note Concerning the Dynamics of Government Bond Yields

2021 ◽  
pp. 056943452098827
Author(s):  
Tanweer Akram
Keyword(s):  
Interest Rate ◽  
Financial Markets ◽  
Yield Curve ◽  
Empirical Studies ◽  
State Theory ◽  
Government Bond ◽  
Bond Yields ◽  
Short Term ◽  
Government Bonds

Keynes argued that the central bank can influence the long-term interest rate on government bonds and the shape of the yield curve mainly through the short-term interest rate. Several recent empirical studies that examine the dynamics of government bond yields not only substantiate Keynes’s view that the long-term interest rate responds markedly to the short-term interest rate but also have relevance for macroeconomic theory and policy. This article relates Keynes’s discussions of money, the state theory of money, financial markets, investors’ expectations, uncertainty, and liquidity preference to the dynamics of government bond yields for countries with monetary sovereignty. Investors’ psychology, herding behavior in financial markets, and uncertainty about the future reinforce the effects of the short-term interest rate and the central bank’s monetary policy actions on the long-term interest rate. JEL classifications: E12; E40; E43; E50; E58; E60; F30; G10; G12; H62; H63

scholarly journals Monetary Policy Surprises over Time

2018 ◽  
Vol 08 (01) ◽  
pp. 1840002 ◽  
Author(s):  
Marcello Pericoli ◽  
Giovanni Veronese
Keyword(s):  
Monetary Policy ◽  
Financial Markets ◽  
Interest Rates ◽  
Euro Area ◽  
Yield Curve ◽  
Sovereign Spreads ◽  
Definition Of ◽  
Term Premia ◽  
The Impact ◽  
Over Time

We document how the impact of monetary surprises on euro-area and US financial markets has changed from 1999 to date. We use a definition of monetary policy surprises, which singles out movements in the long-end of the yield curve — rather than those changing nearby futures on the central bank reference rates. By focusing only on this component of monetary policy, our results are more comparable over time. We find a hump-shaped response of the yield curve to monetary policy surprises, both in the pre-crisis period and since 2013. During the crisis years, Fed path-surprises, largely through their effect on term premia, account for the impact on interest rates, which is found to be increasing in tenor. In the euro area, the path-surprises reflect the shifts in sovereign spreads, and have a large impact on the entire constellation of interest rates, exchange rates and equity markets.

scholarly journals Financial Development and Tax Revenue: How Catalytic Are Political Development and Corruption?

2018 ◽  
Vol 10 (8) ◽  
pp. 92 ◽  
Author(s):  
John Bosco Nnyanzi ◽  
John Mayanja Bbale ◽  
Richard Sendi
Keyword(s):  
Financial Markets ◽  
Financial Development ◽  
Financial Market ◽  
Financial Institutions ◽  
Low Income ◽  
Political Development ◽  
Tax Revenue ◽  
Tax Revenues ◽  
The Impact ◽  
Cent Change

Increasing domestic revenue mobilization remains a challenge for many governments, particularly in low-income countries. Using a sample of East African countries, the study sets off to investigate the impact of financial development from a multi-dimensional perspective on tax revenues for the period 1990 to 2014, and how political development and the control of corruption would enhance the observed nexus. The dynamic panel results from the system GMM estimation approach indicate a significant role of financial development overall and the financial institutions and financial markets in particular. A disaggregation of the duo suggests that it is the depth of financial institutions that greatly matters for tax revenue, with a one per cent change expected to yield about 0.26 per cent change in tax collections. It is then followed by their level of accessibility, financial market depth and efficiency. We fail to find significant evidence in support of financial market access and financial institutions efficiency although the possibility for the latter seems indismissible. Further evidence points to the catalytic nature of a good institutional and political environment in pursuit of higher tax-GDP ratio via financial development. Policies to promote the depth and accessibility of financial institutions as well the depth and efficiency of financial markets in East Africa alongside well-focused anti-corruption programs and democratic governance are likely to yield better fiscal outcomes in terms of domestic tax revenues critically needed to achieve the United Nations Sustainable Development Goals. We also confirm the positive role played by the lagged tax revenue, per capita GDP, trade openness, debt-to-GDP ratio and population density in the tax effort.

scholarly journals Quantitative Easing in the Euro Area: The Dynamics of Risk Exposures and the Impact on Asset Prices.

2016 ◽  
Author(s):  
Ralph S. J. Koijen ◽  
Francois Koulischer ◽  
Benoot Nguyen ◽  
Motohiro Yogo
Keyword(s):  
Euro Area ◽  
Asset Prices ◽  
Quantitative Easing ◽  
The Impact

scholarly journals The Impact of the European Central Bank’s Interest Rates on Investments in the Euro Area

2017 ◽  
Vol 291 (5) ◽  
pp. 51-72
Author(s):  
Joanna Stawska ◽  
Katarzyna Miszczyńska
Keyword(s):  
Interest Rates ◽  
Euro Area ◽  
European Central ◽  
The Impact

scholarly journals ARE THE EFFECTS OF UNCONVENTIONAL MONETARY POLICY ON FINANCIAL MARKETS CAUSING BUBBLES?

2019 ◽  
Vol 1 (1) ◽  
pp. 1-1 ◽  
Author(s):  
Daniel Lacalle
Keyword(s):  
Financial Markets ◽  
Central Banks ◽  
Unintended Consequences ◽  
Quantitative Easing ◽  
Unconventional Monetary Policy ◽  
Monetary Policies ◽  
Policy Makers ◽  
The Past ◽  
Long Run ◽  
Asset Classes

Cheap money can become very expensive in the long run. Unconventional monetary policies have been the main tools of central banks to tackle the economic crisis. In this paper we aim to understand whether these policies have created distortions in the fi nancial markets and if we can be concerned about the creation of “bubbles”, considering whether quantitative easing has impacted fi nancial asset classes’ valuations beyond reasonable fundamentals. I conclude that there is empirical evidence of inordinate expansion of multiples and that central bank policy makers should include “fi nancial market infl ation” as well as consumer price indices (CPI) in their assessment of infl ation expectations. I believe that this should be an essential analysis to avoid unintended consequences in the future, and a possible next fi nancial crisis that central banks will be unable to face with the same tools of the past.

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