Quotation Böck, Maximilian, Feldkircher, Martin, Siklos, Pierre. 2021. International Effects of Euro Area Forward Guidance. Oxford Bulletin of Economics and Statistics. 83 (5), 1066-1110.




In this paper, we investigate the international effects of euro rate forward guidance (FG) and compare them to spillovers from a conventional monetary policy shock (MP). We identify the forward guidance shock via a combination of zero and sign restrictions that use the relationship between expectations and observed data and additionally draw on insights from recent event studies using high-frequency data. To address potential time variation, we use a fully flexible approach that allows to handle both drifts in residual variances and the structural coefficients. Our results show that both shocks lead to considerable international effects on output growth, inflation and equity returns. Moreover, we find that effects are stronger during the period of the global financial crisis, which is particularly true for the FG shock. This implies that monetary policy is generally not hindered in affecting the real economy by the zero lower bound. Also, shocks to expectations can have real domestic effects with international consequences.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Oxford Bulletin of Economics and Statistics
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, VW-C, WH-B
Language English
Title International Effects of Euro Area Forward Guidance
Volume 83
Number 5
Year 2021
Page from 1066
Page to 1110
Reviewed? Y
URL https://onlinelibrary.wiley.com/doi/10.1111/obes.12438
DOI https://doi.org/10.1111/obes.12438
Open Access N
JEL E5, F3, C11, C30


Böck, Maximilian (Former researcher)
Feldkircher, Martin (Vienna School of International Studies, Austria)
Siklos, Pierre (Wilfried Laurier University & Balsillie School of International Affairs, Canada)
Department of Economics (Crespo Cuaresma) (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
5323 Econometrics (Details)
5371 Macroeconomics (Details)
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