Ben Friedman, chairman of the concluding session of the conference, opened the discussion by praising the Monetary Transmission Network (MTN) for its monumental achievement and the authors of the concluding chapter (chapter 24). He then invited the first three discussants to focus on one of the three different channels of monetary policy effectiveness that were discussed during the conference. Jürgen von Hagen was asked to focus on the classical interest rate channel, Javier Freixas on the bank-lending channel and Ben Bernanke on the broader balance sheet and credit channel. Finally, he invited Vítor Gaspar to give a more general evaluation of this summary of the MTN research.

Ben Friedman put forward two questions for the general discussion. First, one should get a sense of the relative contribution of the three channels of monetary policy to the overall effectiveness of monetary policy. Ideally we should get three figures that add up 100. Second, one should understand how the research of the MTN changes the priors of the researchers working on the transmission mechanism. To what extent should these priors be changed, and in what way should our earlier beliefs be adjusted because of the results of the MTN?

Jürgen von Hagen

The survey presented in chapter 24 skilfully and competently draws together the large amount of research into the transmission of monetary policy in the euro area undertaken by the Eurosystem in recent years and presented at the conference.