ECB Policy Making and the Financial Crisis
AbstractWe estimate Taylor rule models for the euro area using Consensus Economics forecasts of inflation and output growth for the period 1998.6-2010.8. We first examine whether the recent financial crisis has affected ECB policies. Our results indicate that the ECB puts stronger emphasis on maintaining price stability than earlier point estimates suggested. Next, we analyse whether economic developments in individual euro area countries affect ECB decisions. Despite the diverging economic developments in the countries in the euro area, notably during the recent financial crisis, we do not find support for the view that policy decisions have been influenced by regional developments.
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Bibliographic InfoPaper provided by Netherlands Central Bank, Research Department in its series DNB Working Papers with number 272.
Date of creation: Dec 2010
Date of revision:
Taylor rule; ECB; regional influence; real time data;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-03 (All new papers)
- NEP-CBA-2011-01-03 (Central Banking)
- NEP-EEC-2011-01-03 (European Economics)
- NEP-MON-2011-01-03 (Monetary Economics)
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- Gerlach, Stefan & Lewis, John, 2011.
"ECB Reaction Functions and the Crisis of 2008,"
CEPR Discussion Papers
8472, C.E.P.R. Discussion Papers.
- Stefan Gerlach & John Lewis, 2014. "Zero lower bound, ECB interest rate policy and the financial crisis," Empirical Economics, Springer, vol. 46(3), pages 865-886, May.
- Fendel, Ralf & Frenkel, Michael & Rülke, Jan-Christoph, 2011. ""Ex-ante" Taylor rules and expectation forming in emerging markets," Journal of Comparative Economics, Elsevier, vol. 39(2), pages 230-244, June.
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