The Impact of EMU on Inflation Expectations
AbstractThis paper analyses the impact of the monetary regime change from the Bundesbank to the ECB on inflation expectations. In the theoretical part, the Barro-Gordon model is used to derive the potential effect of a new central bank on inflation and inflation expectations. The econometric investigation is based on a flexible specification of expectation formation which allows both for rational and adaptive elements. The results indicate that the monetary regime change did not have a strong and lasting impact on the formation of inflation expectations and that the credibility of both central banks is not perceived to differ significantly anymore. Copyright Springer Science + Business Media, LLC 2006
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Bibliographic InfoArticle provided by Springer in its journal Open Economies Review.
Volume (Year): 17 (2006)
Issue (Month): 2 (April)
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Web page: http://www.springerlink.com/link.asp?id=100323
inflation expectations; credibility; ZEW financial market survey; ECB; EMU; Carlson-Parkin;
Other versions of this item:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
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