Are there monetary clusters in the Eurozone? The impact of ECB policy

Abstract

This paper analyses what effects the monetary policy of the European Central Bank have on the economic activity of Eurozone countries. We identify groups of countries which exhibit different economic responsesto monetary policy and the factors driving such spatial differences. We distinguish three periods,spanning from 2001 to 2017 and examine conventional as well as unconventional monetary policies in different economic backgrounds of expansion and crisis. We find problems of spatially asymmetric transmission of monetary policy in the period 2008M10–2014M12 and note that different spatial responses might operate in favour of monetary policy or be indifferent to this policy.