Heterogeneous consumers in the Euro-Area, facing homogeneous monetary policy: Tale of two large economies
Author's Department
Economics Department
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https://doi.org/10.1016/j.jeca.2021.e00214
Document Type
Research Article
Publication Title
Journal of Economic Asymmetries
Publication Date
11-1-2021
doi
10.1016/j.jeca.2021.e00214
Abstract
This study examines consumer behavior in the Euro-Area in response to monetary policy changes. Selecting two major Euro-Area economies, we apply factor model to investigate how German and French consumers update their macroeconomic expectations. Results at both aggregate and disaggregated levels show asymmetries in consumer responses to different monetary policy stances. We find sizable differences in the way German consumers adjust their expectations compared to the French consumers. While we record inconsistencies across different consumer expectations, we also find behavioral differences in the consumer from similar groups across both countries. The paper concludes that though consumers update their expectations immediately to a monetary policy change, French consumers show a relative discomfort and lesser confidence in the post-recession period despite accommodative moves by the European Central Bank (ECB).
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APA Citation
SYED, S.
(2021). Heterogeneous consumers in the Euro-Area, facing homogeneous monetary policy: Tale of two large economies. Journal of Economic Asymmetries, 24,
10.1016/j.jeca.2021.e00214
https://fount.aucegypt.edu/faculty_journal_articles/2792
MLA Citation
SYED, Sarfaraz Ali Shah
"Heterogeneous consumers in the Euro-Area, facing homogeneous monetary policy: Tale of two large economies." Journal of Economic Asymmetries, vol. 24, 2021,
https://fount.aucegypt.edu/faculty_journal_articles/2792