Stimulating economic recovery through euro area growth poles: call for more directed unconventional monetary policy measures?

• Authors: Jana Kotlebova , Maria Siranova

Abstracts

EN

Research background: Transfer of newly created money through unconventional monetary measures follows the official European Central Bank distribution key. Yet, it does not take into account the ability of individual countries to drive growth process in other economies. Money spent to boost domestic credit provisioning in growth pole-like economies is more likely to spill over to other adjoined economies and help them to recover, even in the presence of depressed domestic demand and/or overleveraged domestic banking sector. Purpose of the article: This paper reports growth pole scores for 19 euro area countries, and compares it to the official distribution key used to transmit newly created source of funding. Methods: We modify the procedure developed in World Bank (2011) for growth pole com-putation in order to account for strength of linkages connecting member states. Findings & Value added: Our results suggest that the official distribution key might not be completely optimal once looking at the growth pole scores. Countries small in economic size (Baltic states, Slovakia and Slovenia) would benefit from a more differentiated distribution, as they strongly outperform their benchmark set by the official distribution key. On the other hand, big euro area economies do not achieve the levels used in official distribution key, taking into account their growth pole potential for other euro area economies.

Keywords

EN

growth pole; unconventional monetary policy; network analysis

• Publisher: Instytut Badań Gospodarczych
• Journal: Equilibrium. Quarterly Journal of Economics and Economic Policy
• Year: 2017
• Volume: 12
• Issue: 4
• Pages: 633-653

Dates

published

2017

Contributors

author

Jana Kotlebova

• University of Economics in Bratislava

author

Maria Siranova

• University of Economics in Bratislava, Slovak Academy of Sciences

Identifiers

DOI

10.24136/eq.v12i4.33

Biblioteka Nauki

22446628