Accessible Version
Country-Specific Effects of Euro-Area Monetary Policy: The Role of Sectoral Differences, Accessible Data
Figure 1. Headline Inflation and Real GDP of the Euro Area
Left Panel: Euro Area
Percent
| Period | Headline Inflation | ECB Deposit Rate | OIS Forecast |
|---|---|---|---|
| 1/16/2019 | 1.388341867 | -0.4 | - |
| 2/13/2019 | 1.493417174 | -0.4 | - |
| 3/16/2019 | 1.399280925 | -0.4 | - |
| 4/15/2019 | 1.722802942 | -0.4 | - |
| 5/16/2019 | 1.221506204 | -0.4 | - |
| 6/15/2019 | 1.268133346 | -0.4 | - |
| 7/16/2019 | 1.020702937 | -0.4 | - |
| 8/16/2019 | 1.009518316 | -0.4 | - |
| 9/15/2019 | 0.833173722 | -0.5 | - |
| 10/16/2019 | 0.726022163 | -0.5 | - |
| 11/15/2019 | 0.960614793 | -0.5 | - |
| 12/16/2019 | 1.32628544 | -0.5 | - |
| 1/16/2020 | 1.359619307 | -0.5 | - |
| 2/14/2020 | 1.219748306 | -0.5 | - |
| 3/16/2020 | 0.747484427 | -0.5 | - |
| 4/15/2020 | 0.313986679 | -0.5 | - |
| 5/16/2020 | 0.085518814 | -0.5 | - |
| 6/15/2020 | 0.265629447 | -0.5 | - |
| 7/16/2020 | 0.390811171 | -0.5 | - |
| 8/16/2020 | -0.171330668 | -0.5 | - |
| 9/15/2020 | -0.313420078 | -0.5 | - |
| 10/16/2020 | -0.275037936 | -0.5 | - |
| 11/15/2020 | -0.285442436 | -0.5 | - |
| 12/16/2020 | -0.265579057 | -0.5 | - |
| 1/16/2021 | 0.910223244 | -0.5 | - |
| 2/13/2021 | 0.937260903 | -0.5 | - |
| 3/16/2021 | 1.331684581 | -0.5 | - |
| 4/15/2021 | 1.621929242 | -0.5 | - |
| 5/16/2021 | 1.984240008 | -0.5 | - |
| 6/15/2021 | 1.901788249 | -0.5 | - |
| 7/16/2021 | 2.164830991 | -0.5 | - |
| 8/16/2021 | 2.955758963 | -0.5 | - |
| 9/15/2021 | 3.363185976 | -0.5 | - |
| 10/16/2021 | 4.051355207 | -0.5 | - |
| 11/15/2021 | 4.866412214 | -0.5 | - |
| 12/16/2021 | 4.964336662 | -0.5 | - |
| 1/16/2022 | 5.10824155 | -0.5 | - |
| 2/13/2022 | 5.874549934 | -0.5 | - |
| 3/16/2022 | 7.443912513 | -0.5 | - |
| 4/15/2022 | 7.438865036 | -0.5 | - |
| 5/16/2022 | 8.052504189 | -0.5 | - |
| 6/15/2022 | 8.644382544 | -0.5 | - |
| 7/16/2022 | 8.866171004 | 0 | - |
| 8/16/2022 | 9.140581589 | 0 | - |
| 9/15/2022 | 9.927182229 | 0.75 | - |
| 10/16/2022 | 10.62060141 | 1.5 | - |
| 11/15/2022 | 10.05459509 | 1.5 | - |
| 12/16/2022 | 9.196339585 | 2 | - |
| 1/16/2023 | 8.64498645 | 2 | - |
| 2/13/2023 | 8.501879363 | 2.5 | - |
| 3/16/2023 | 6.884501136 | 3 | - |
| 4/15/2023 | 6.958561376 | 3 | - |
| 5/16/2023 | 6.099767382 | 3.25 | - |
| 6/15/2023 | 5.52089565 | 3.5 | - |
| 7/16/2023 | 5.309885607 | 3.75 | - |
| 8/16/2023 | 5.243954179 | 3.75 | - |
| 9/15/2023 | 4.335066242 | 4 | - |
| 10/16/2023 | 2.900107411 | 4 | - |
| 11/15/2023 | 2.397684994 | 4 | - |
| 12/16/2023 | 2.928974444 | 4 | - |
| 1/16/2024 | 2.768770267 | 4 | - |
| 2/14/2024 | 2.581656219 | 4 | - |
| 3/16/2024 | 2.427660618 | 4 | - |
| 4/15/2024 | 2.371669916 | 4 | - |
| 5/16/2024 | 2.565976451 | 4 | - |
| 6/15/2024 | 2.518830485 | 3.75 | - |
| 7/16/2024 | 2.577821012 | 3.75 | - |
| 8/16/2024 | 2.168830122 | 3.75 | - |
| 9/15/2024 | 1.743952423 | 3.5 | - |
| 10/16/2024 | - | 3.25 | - |
| 10/29/2024 | - | - | 3.225178242 |
| 11/5/2024 | - | - | 3.191242695 |
| 11/22/2024 | - | - | 3.178106308 |
| 12/22/2024 | - | - | 3.148789167 |
| 1/22/2025 | - | - | 3.056907415 |
| 2/22/2025 | - | - | 2.983327866 |
| 3/22/2025 | - | - | 2.897277832 |
| 4/22/2025 | - | - | 2.807258129 |
| 5/22/2025 | - | - | 2.722446203 |
| 6/22/2025 | - | - | 2.646399975 |
| 7/22/2025 | - | - | 2.581466198 |
| 8/22/2025 | - | - | 2.516947746 |
| 9/22/2025 | - | - | 2.461618185 |
| 10/22/2025 | - | - | 2.408060551 |
| 4/22/2026 | - | - | 2.199408531 |
| 10/22/2026 | - | - | 2.10311842 |
Note: (Left Panel) Euro-area headline inflation (12-months), ECB deposit rate, and policy rate forecast implied by overnight index swap (OIS) quotes. Euro-area headline inflation (12-months), ECB deposit rate, and policy rate forecast implied by overnight index swap (OIS) quotes. Forecast period is shaded.
Source: ECB, Bloomberg.
Right Panel: Real GDP
Index; 2019:Q4
| Period | Euro area | France | Germany | Italy | Spain |
|---|---|---|---|---|---|
| 3/16/2019 | 99.45438936 | 99.88840981 | 99.70395831 | 100.468205 | 98.95725204 |
| 6/15/2019 | 99.80759371 | 100.4786548 | 99.77048453 | 100.7457978 | 99.24263569 |
| 9/15/2019 | 99.98819736 | 100.5162245 | 100.038807 | 100.373118 | 99.43268239 |
| 12/16/2019 | 100 | 100 | 100 | 100 | 100 |
| 3/16/2020 | 96.65471649 | 94.89019237 | 97.79909081 | 94.18128757 | 94.82263876 |
| 6/15/2020 | 85.88800295 | 83.2010398 | 89.09746092 | 82.56642946 | 77.9533288 |
| 9/15/2020 | 95.90221099 | 96.23215236 | 96.85220091 | 94.47093054 | 90.34964202 |
| 12/16/2020 | 96.23231045 | 96.11768449 | 97.95210112 | 94.41812876 | 91.0053972 |
| 3/16/2021 | 96.79804303 | 96.4717995 | 96.86217984 | 95.95047587 | 92.09894973 |
| 6/15/2021 | 98.96060575 | 97.69833238 | 99.32919392 | 98.24483375 | 93.36153718 |
| 9/15/2021 | 100.8269951 | 100.4839305 | 99.36689212 | 101.3064607 | 95.20179133 |
| 12/16/2021 | 101.6080065 | 101.0892034 | 99.97893336 | 102.2890996 | 97.13581439 |
| 3/16/2022 | 102.1659137 | 100.9360467 | 100.1607717 | 102.8017808 | 98.44042538 |
| 6/15/2022 | 103.0584561 | 101.3441982 | 100.1419226 | 104.4048954 | 100.1383013 |
| 9/15/2022 | 103.6776783 | 101.8828047 | 100.734006 | 104.9567946 | 100.9938251 |
| 12/16/2022 | 103.5720517 | 101.9453144 | 100.2184278 | 104.7567613 | 101.5705509 |
| 3/16/2023 | 103.5649075 | 101.9840033 | 100.3636767 | 105.140834 | 102.2532764 |
| 6/15/2023 | 103.6187522 | 102.6653749 | 100.2106664 | 104.9026782 | 102.5047904 |
| 9/15/2023 | 103.6687617 | 102.7732881 | 100.4024836 | 105.094605 | 103.1799893 |
| 12/16/2023 | 103.7270001 | 103.2321188 | 100.028828 | 105.0941668 | 103.9382944 |
| 3/16/2024 | 104.0436667 | 103.4907906 | 100.2583435 | 105.368035 | 104.8530901 |
| 6/15/2024 | 104.2406152 | 103.6604141 | 100.1918173 | 105.5389287 | 105.6919926 |
Note: (Right Panel) Real GDP of the euro area, France, Germany, Italy and Spain (in levels, with 2019:Q4 set to 100).
Source: Haver Analytics.
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Figure 2: Value Added Shares of the Manufacturing and Service Sectors
| Country | Label | Manufacturing Share | Service Share |
|---|---|---|---|
| Austria | AT | 0.2067771 | 0.5242555 |
| Belgium | BE | 0.1425269 | 0.5630308 |
| Cyprus | CY | 0.0611684 | 0.6331253 |
| Croatia | HR | 0.1531401 | 0.552494 |
| Estonia | EE | 0.1715355 | 0.5569944 |
| Finland | FI | 0.1775311 | 0.4970527 |
| France | FR | 0.1149108 | 0.5830184 |
| Germany | DE | 0.2286196 | 0.5185047 |
| Greece | EL | 0.0846167 | 0.601554 |
| Ireland | IE | 0.2902578 | 0.5352608 |
| Italy | IT | 0.1657105 | 0.5842872 |
| Lithuania | LT | 0.2048022 | 0.5510501 |
| Luxembourg | LU | 0.0581955 | 0.7122769 |
| Latvia | LV | 0.1347334 | 0.5682228 |
| Malta | MT | 0.0773726 | 0.7079819 |
| Netherlands | NL | 0.1211631 | 0.5694793 |
| Portugal | PT | 0.1429707 | 0.5604107 |
| Slovakia | SK | 0.2692555 | 0.4706722 |
| Spain | ES | 0.1180881 | 0.571316 |
| Slovenia | SI | 0.2258919 | 0.503238 |
Note: Value added of the manufacturing and service sector, as a share of total 2019 value added.
Source: Eurostat. AU: Austria, BE: Belgium, CW: Croatia, CP: Cyprus, EO: Estonia, FN: Fin-land, FR: France, GE: Germany, GR: Greece, IR: Ireland, IT: Italy, LV: Latvia, LN: Lithuania, LU: Luxembourg, MLT: Malta, NE: Netherlands, PO: Portugal, SK: Slovakia, VS: Slovenia, SP: Spain; Authors' calculations
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Figure 3. ECB Policy Rate Increase: Change in Euro Area Real GDP and Sectoral Value Added
Left Panel
Percent
| Period | Response of GDP Growth | Response of GDP Growth - Upper Bound of Confidence Band | Response of GDP Growth - Low Bound of Confidence Band |
|---|---|---|---|
| 0 | -0.14592 | 0.140424 | -0.432264 |
| 1 | -0.54125 | -0.0357364 | -1.0467636 |
| 2 | -0.69762 | -0.1775104 | -1.2177296 |
| 3 | -0.95238 | -0.3323124 | -1.5724476 |
| 4 | -0.99359 | -0.3729156 | -1.6142644 |
| 5 | -0.92892 | -0.2615712 | -1.5962688 |
| 6 | -0.83087 | -0.0877696 | -1.5739704 |
| 7 | -0.70069 | 0.1989156 | -1.6002956 |
| 8 | -0.52409 | 0.4993684 | -1.5475484 |
| 9 | -0.40239 | 0.6735648 | -1.4783448 |
| 10 | -0.20037 | 0.8670404 | -1.2677804 |
| 11 | 0.31204 | 1.3874208 | -0.7633408 |
| 12 | 0.61624 | 1.8676256 | -0.6351456 |
Note: (Left panel) Effect of unexpected increase in ECB policy rate by one percentage point on euro-area real GDP. Solid lines show the point estimates of beta, while the shaded areas represent 90 percent confidence bands.
Source: Eurostat; Author calculations.
Right Panel
Percent
| Period | Response of Value-added Growth in Services | Response of Value-added Growth in Services - Upper Bound of Confidence Band | Response of Value-added Growth in Services - Lower Bound of Confidence Band | Response of Value-added Growth in Manufacturing | Response of Value-added Growth in Manufacturing - Upper Bound of Confidence Band | Response of Value-added Growth in Manufacturing - Lower Bound of Confidence Band |
|---|---|---|---|---|---|---|
| 0 | -0.10025 | 0.2030188 | -0.4035188 | -0.61178 | 0.1150844 | -1.3386444 |
| 1 | -0.42365 | 0.0416836 | -0.8889836 | -1.86639 | -0.3926696 | -3.3401104 |
| 2 | -0.49485 | 0.024784 | -1.014484 | -2.23432 | -0.9655012 | -3.5031388 |
| 3 | -0.69899 | -0.0667044 | -1.3312756 | -2.77241 | -1.498704 | -4.046116 |
| 4 | -0.77518 | -0.0858552 | -1.4645048 | -2.67223 | -1.4632712 | -3.8811888 |
| 5 | -0.66458 | 0.1890728 | -1.5182328 | -2.32836 | -1.0409272 | -3.6157928 |
| 6 | -0.48114 | 0.54468 | -1.50696 | -1.94493 | -0.4957112 | -3.3941488 |
| 7 | -0.30334 | 0.9963764 | -1.6030564 | -1.35083 | 0.4135148 | -3.1151748 |
| 8 | -0.09561 | 1.3519688 | -1.5431888 | -0.55285 | 1.4600368 | -2.5657368 |
| 9 | 0.23727 | 1.7572384 | -1.2826984 | -0.26295 | 1.6158504 | -2.1417504 |
| 10 | 0.57111 | 2.0307428 | -0.8885228 | 0.20185 | 1.6748488 | -1.2711488 |
| 11 | 1.19255 | 2.4442144 | -0.0591144 | 1.70247 | 3.2474648 | 0.1574752 |
| 12 | 1.59126 | 2.8371024 | 0.3454176 | 2.46662 | 4.813132 | 0.120108 |
Note: (Right Panel) Effect of unexpected increase in ECB policy rate by one percentage point on euro-area manufacturing and services value added. Solid lines show the point estimates of beta, while the shaded areas represent 90 percent confidence bands.
Source: Eurostat; Authors' calculations.
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Figure 4. ECB Policy Rate Increase: Change in Country Specific Real GDP By Sectoral Value Added Share
Left Panel
| Country | Label | Services Share | Response of GDP Growth |
|---|---|---|---|
| Austria | AT | 0.5125434 | -0.85071 |
| Belgium | BE | 0.5416629 | -0.64659 |
| Cyprus | CY | 0.5878735 | -1.43794 |
| Croatia | HR | 0.5156851 | -0.84348 |
| Estonia | EE | 0.5313695 | -0.96446 |
| Finland | FI | 0.4639546 | -1.44952 |
| France | FR | 0.5568133 | -0.38412 |
| Germany | DE | 0.5189013 | -1.17071 |
| Greece | EL | 0.5720274 | -0.26889 |
| Ireland | IE | 0.5283071 | -1.54840 |
| Italy | IT | 0.5569675 | -0.31060 |
| Lithuania | LT | 0.5123371 | -1.73709 |
| Luxembourg | LU | 0.7127889 | -1.68824 |
| Latvia | LV | 0.5417884 | -1.41159 |
| Malta | MT | 0.6125968 | 0.17810 |
| Netherlands | NL | 0.5507767 | -0.79944 |
| Portugal | PT | 0.5235214 | -0.59352 |
| Slovakia | SK | 0.5038196 | -2.80424 |
| Spain | ES | 0.5261375 | 0.08216 |
| Slovenia | SI | 0.4874792 | -1.31402 |
Note: (Left Panel) Vertical axis: Country specific effect of an unexpected increase in the ECB’s policy rate by one percentage point on real GDP by services value added share. Country specific effect of an unexpected increase in the ECB’s policy rate by one percentage point on real GDP. Horizontal axis: Value added share of each country’s service. Shares are averaged over all sample quarters.
Source: Eurostat; Authors' calculations
Right Panel
| Country | Label | Manufacturing Share | Response of GDP Growth |
|---|---|---|---|
| Austria | AT | 0.1904589 | -0.85071 |
| Belgium | BE | 0.1532584 | -0.64659 |
| Cyprus | CY | 0.0633447 | -1.43794 |
| Croatia | HR | 0.1640628 | -0.84348 |
| Estonia | EE | 0.1595068 | -0.96446 |
| Finland | FI | 0.1910421 | -1.44952 |
| France | FR | 0.1184787 | -0.38412 |
| Germany | DE | 0.2203048 | -1.17071 |
| Greece | EL | 0.0840732 | -0.26889 |
| Ireland | IE | 0.2436911 | -1.54840 |
| Italy | IT | 0.1657613 | -0.31060 |
| Lithuania | LT | 0.1862046 | -1.73709 |
| Luxembourg | LU | 0.0676981 | -1.68824 |
| Latvia | LV | 0.1373753 | -1.41159 |
| Malta | MT | 0.1190837 | 0.17810 |
| Netherlands | NL | 0.1210474 | -0.79944 |
| Portugal | PT | 0.141131 | -0.59352 |
| Slovakia | SK | 0.1906394 | -2.80424 |
| Spain | ES | 0.1360301 | 0.08216 |
| Slovenia | SI | 0.2065315 | -1.31402 |
Note: (Right Panel) Vertical axis: Country specific effect of an unexpected increase in the ECB’s policy rate by one percentage point on real GDP by manufacturing value added share. Country specific effect of an unexpected increase in the ECB’s policy rate by one percentage point on real GDP. Horizontal axis: Value added share of each country’s manufacturing. Shares are averaged over all sample quarters.
Source: Eurostat; Authors' calculations
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Figure 5. ECB Policy Rate Decrease: Change in Country Specific Real GDP By Sectoral Value Added Share
Left Panel
| Country | Label | Services Share | Response of GDP Growth |
|---|---|---|---|
| Austria | AT | 0.5125434 | 1.49757 |
| Belgium | BE | 0.5416629 | 1.12000 |
| Cyprus | CY | 0.5878735 | 2.67963 |
| Croatia | HR | 0.5156851 | 1.70244 |
| Estonia | EE | 0.5313695 | 2.71326 |
| Finland | FI | 0.4639546 | 2.76432 |
| France | FR | 0.5568133 | 0.65453 |
| Germany | DE | 0.5189013 | 2.15039 |
| Greece | EL | 0.5720274 | -0.32156 |
| Ireland | IE | 0.5283071 | 2.51122 |
| Italy | IT | 0.5569675 | 0.48574 |
| Lithuania | LT | 0.5123371 | 4.05691 |
| Luxembourg | LU | 0.7127889 | 3.08600 |
| Latvia | LV | 0.5417884 | 4.24908 |
| Malta | MT | 0.6125968 | -0.45979 |
| Netherlands | NL | 0.5507767 | 1.05349 |
| Portugal | PT | 0.5235214 | 0.89219 |
| Slovakia | SK | 0.5038196 | 4.59421 |
| Spain | ES | 0.5261375 | -0.39566 |
| Slovenia | SI | 0.4874792 | 2.13025 |
Note: (Left Panel) Vertical axis: Country specific effect of accommodative ECB interest rate changes by one percentage point on real GDP by services value added share. Country specific effect of accommodative ECB interest rate changes by one percentage point on real GDP. Horizontal axis: Value added share of each country’s service. Shares are averaged over all sample quarters.
Source: Eurostat; Authors' calculations
Right Panel
| Country | Label | Manufacturing Share | Response of GDP Growth |
|---|---|---|---|
| Austria | AT | 0.1904589 | 1.49757 |
| Belgium | BE | 0.1532584 | 1.12000 |
| Cyprus | CY | 0.0633447 | 2.67963 |
| Croatia | HR | 0.1640628 | 1.70244 |
| Estonia | EE | 0.1595068 | 2.71326 |
| Finland | FI | 0.1910421 | 2.76432 |
| France | FR | 0.1184787 | 0.65453 |
| Germany | DE | 0.2203048 | 2.15039 |
| Greece | EL | 0.0840732 | -0.32156 |
| Ireland | IE | 0.2436911 | 2.51122 |
| Italy | IT | 0.1657613 | 0.48574 |
| Lithuania | LT | 0.1862046 | 4.05691 |
| Luxembourg | LU | 0.0676981 | 3.08600 |
| Latvia | LV | 0.1373753 | 4.24908 |
| Malta | MT | 0.1190837 | -0.45979 |
| Netherlands | NL | 0.1210474 | 1.05349 |
| Portugal | PT | 0.141131 | 0.89219 |
| Slovakia | SK | 0.1906394 | 4.59421 |
| Spain | ES | 0.1360301 | -0.39566 |
| Slovenia | SI | 0.2065315 | 2.13025 |
Note: (Right Panel) Vertical axis: Country specific effect of accommodative ECB interest rate changes by one percentage point on real GDP by manufacturing value added share. Country specific effect of accommodative ECB interest rate changes by one percentage point on real GDP. Horizontal axis: Value added share of each country’s manufacturing. Shares are averaged over all sample quarters.
Source: Eurostat; Authors' calculations
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