FIVE YEARS OF SINGLE EUROPEAN MONETARY POLICY IN PRACTICE: IS THE ECB RULE-BASED?

The article discusses the conduct of monetary policy of the ECB during its first five years. The authors estimate different versions of the forward‐looking policy rule proposed by Clarida et al. (1998, 2000). The results suggest that the ECB applied indeed a Taylor‐type rule to its monetary policy....

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Bibliographic Details
Published in:Contemporary economic policy 2006-01, Vol.24 (1), p.106-115
Main Authors: FENDEL, RALF M., FRENKEL, MICHAEL R.
Format: Article
Language:English
Subjects:
Aggregates
Analysis
Banking industry
Central banks
Consumer Price Index
Councils
Economic analysis
Economic and Monetary Union
Euro
Europe
European Central Bank
European Monetary Union
Eurozone
Financial institutions
GDP
Generalized method of moments
Gross Domestic Product
Inflation
Interest rates
Monetary aggregates
Monetary policy
Policy analysis
Regression analysis
Studies
Taylor rule
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Summary:The article discusses the conduct of monetary policy of the ECB during its first five years. The authors estimate different versions of the forward‐looking policy rule proposed by Clarida et al. (1998, 2000). The results suggest that the ECB applied indeed a Taylor‐type rule to its monetary policy. The implied inflation targets that are extracted from the regressions are close to the range of the target that the ECB announced. (JEL E52,E58,F4)
ISSN:1074-3529
1465-7287
DOI:10.1093/cep/byj002