van den End, Jan Willem
[Verfasser:in]
;
Konietschke, Paul
[Sonstige Person, Familie und Körperschaft];
SamarIna, Anna
[Sonstige Person, Familie und Körperschaft];
Stanga, Irina
[Sonstige Person, Familie und Körperschaft]
Erschienen in:De Nederlandsche Bank Working Paper ; No. 684
Umfang:
1 Online-Ressource (41 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.3610866
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 18, 2020 erstellt
Beschreibung:
This paper examines the link between interest rates and expenditures, known as the IS-curve. Specifically, we analyse whether the reaction of spending behaviour to monetary policy changes is different in a low compared to a normal interest rate environment. We estimate the nonlinear IS-curve for the euro area and the five largest euro area countries over the period 1999q2-2019q1 and study whether the IS-curve relationship is regime-dependent. We employ smooth-transition local projections to estimate the impulse responses of the output gap, the growth of consumption, investment, and savings to a contractionary monetary policy shock under normal and low interest rate regimes. Our results point to a possible flattening of the IS-curve, related to substitution effects becoming weaker relative to income effects in a low interest rate regime