МНОГО НИСЪК ЛИХВЕН ПРОЦЕНТ (ДОРИ ОТРИЦАТЕЛЕН) И ПАРИЧНА ПОЛИТИКА: ОЦЕНКА НА MIDAS-VAR ЗА ЕВРОЗОНАТА ОТ 1999Q1 ДО 2019Q4
VERY LOW INTEREST RATE (EVEN NEGATIVE) AND MONETARY POLICY: MIDAS-VAR ESTIMATION FOR THE EURO ZONE FROM 1999Q1 TO 2019Q4

Summary/Abstract: The paper deals with the efficiency of the monetary policy on growth and inflation for the Euro zone within a low interest rate environment (LIRE) even if since 2022 the interest rate have increased. It is worthy to note that the low interest rate period was a very extraordinary situation and the theoretical scope was not able to explain this situation. Since the financial crisis, several conventional and unconventional measures were undertaken to avoid the systemic risk. The interest rate has been reduced to reach its effective lower bound (ELB). The ELB case has largely been discussed by the economic and empirical literature particularly by Keynesian and post-Keynesian theories. They have assumed that when the interest rate is too low, the monetary policy becomes inefficient because of the famous liquidity trap. To validate the liquidity trap theory and to contribute empirically to understand the role of (un)conventional policy, we run a MIDAS-VAR model for the Euro-zone. We have distinguished three periods: the full period (1999Q1-2019Q4), the non-negative interest rate period (1999Q1-2013Q4) and the post-crisis period (2008Q1-2019Q4). The results have suggested that the monetary policy, even in a low interest rate environment, sill simulates output (measured by the GDP) and inflation (HCPI, Harmonized Consumption Price Index).

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