• The bank lending channel and monetary policy rules for Eurozone banks: further extensions

      Apergis, Nicholas; Miller, Stephen; Alevizopoulou, Effrosyni; Curtin University; University of Nevada Las Vegas; University of Piraeus (De Gruyter, 2014-06-12)
      The monetary authorities affect macroeconomic activity through various channels of influence. This paper examines the bank lending channel, which considers how central bank actions affect the loan supply through its main indicator of policy, the real short-term interest rate. This paper employs the endogenously determined target interest rate, emanating from the European Central Bank’s monetary policy rule, to examine the operation of the bank lending channel. Furthermore, it examines whether different bank-specific characteristics affect how Eurozone banks react to monetary shocks. That is, do sounder banks react more to the monetary policy rule than less-sound banks? The paper finds evidence of an active and statistically and economically significant bank lending channel for the Eurozone between 2000 and 2009.
    • The inflation–output volatility trade-off: a case where anti-inflation monetary policy turns out to be successful, a historical assessment

      Apergis, Nicholas; University of Piraeus (Elsevier, 2003-12)
      Over the period 1988–2000, the Greek monetary authorities seemed to have implemented a successful disinflation policy. The question, however, is whether this disinflation was optimal or not. This paper, through a theoretical model and the GMM approach, constructs an optimal policy frontier in terms of a trade-off between output and inflation variabilities. The frontier yields increases in the output variance when policymakers attempt to decrease inflation variances, and vice versa. The location of the actual monetary policy performance suggests a policy close to the frontier, implying a successful monetary policy.