Title: Unconventional monetary policy expansion: the economic impact through a dynamic CGE model

Authors: Claudio Socci; Francesca Severini; Rosita Pretaroli; Irfan Ahmed; Clio Ciaschini

Addresses: Department of Economics and Law, University of Macerata, Macerata 62100, Italy ' Department of Economics and Law, University of Macerata, Macerata 62100, Italy ' Department of Economics and Law, University of Macerata, Macerata 62100, Italy ' Department of Economics and Law, University of Macerata, Macerata 62100, Italy ' Department of Economics, Polytechnic University of Marche, Ancona, 60121, Italy

Abstract: The ongoing economic stagnation and low inflation rates affecting EU have refuelled the debate on the role and the limits of monetary policy in pushing the economic growth. Given the tight margins for fiscal policy for EU state members, traditional and unconventional monetary policies are becoming more looked-for to break out of this condition. However, the main issue on whether the real or nominal aspects prevails still remains. In this situation, a framework able to identify and analyse any interaction between economic and financial flows becomes crucial to detect the dynamics pushing towards expansions or contractions resulting from monetary policies. Therefore, the aim of this paper is to investigate the direct and indirect impact of monetary policies implemented by the European Central Bank on the main Italian macroeconomic variables both in aggregate and disaggregate terms. For this purpose we use dynamic computable general equilibrium (CGE) model calibrated on the financial social accounting matrix for Italian economy.

Keywords: monetary policy; central banking; money supply; dynamic computable general equilibrium models; social accounting matrix; Italy.

DOI: 10.1504/IJMEF.2018.092354

International Journal of Monetary Economics and Finance, 2018 Vol.11 No.2, pp.140 - 162

Received: 20 May 2016
Accepted: 09 Nov 2016

Published online: 03 Jun 2018 *

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