Seminar paper from the year 2024 in the subject Economics - Macro-economics, general, grade: 1,0, University of Münster, language: English, abstract: This paper seeks to describe and analyze the intricacies of monetary policy transmission in the Eurozone by employing a Structural Vector Autoregression (SVAR) model. In particular, this paper investigates how policy-induced shocks to the main refinancing operations (MRO) rate reverberate through key macroeconomic variables, including (real) GDP growth, inflation (measured by the HICP), unemployment, the money supply (M3), and the nominal effective exchange rate. A particular focus on exploring these dynamics is set on carefully addressing the inherent challenges of econometric modeling, including variable selection, model specification (including an overview of various identifying restrictions for the SVAR model), and checking for robustness.
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