Monetary Policy Transmission Mechanism Heterogeneity in the Eurozone

Current empirical analyses show that Eurozone countries display noticeable heterogeneity in terms of economic development, structure, exposure to exogenous shocks and adjustment mechanism. The single monetary policy implemented by European Central Bank is not optimal for all member states, if there are different inflation rates and the single monetary policy transmission mechanism is heterogeneous across the countries. The problem solved in this article is transmission mechanism heterogeneity identification, especially to answer the question if the transmission mechanism changes over the time and what is the impact on the economic activity. The topicality is in concentration on the new countries joining the Euro, especially on the Czech Republic.