Aspects of the Monetary Transmission Mechanism under Exchange Rate Targeting: The Case of France

This paper attempts to characterize the main patterns of the monetary transmission mechanism in France. Specifically, we are primarily interested in investigating the patterns according to which changes in the monetary authorities' policy instruments affect the ultimate macroeconomic variables (nominal and real) of interest, as well as the principal channels through which these effects operate. While the primary focus is on the effects of variables that are closely controlled by the monetary authorities, we also address the impact of autonomous shocks to other, intermediate, transmission variables.