ECB prevented further eurozone deflation, BdF paper says
Researchers say inflation and GDP growth would have entered negative territory in 2015–17
The European Central Bank stopped the eurozone from suffering deflation from 2015–17, a working paper published by the Banque de France argues.
In Evaluating the macroeconomic effects of the ECB’s unconventional monetary policies, Sarah Mouabbi and Jean-Guillaume Sahuc look at data from the eurozone from 1999 to 2017.
The authors present a dynamic stochastic general equilibrium model, which features “shadow interest rates” derived from a term structure model. The authors write that the shadow
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