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Is the View from the Eurotower Purely European? - National Divergence and ECB Interest Rate Policy Author info | Abstract | Publisher info | Download info | Related research | Statistics Huefner, Felix P (ZEW Mannheim)
Friedrich Heinemann
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The official view on ECB monetary policy claims that decisions are based on euro zone data and that diverging regional developments are disregarded. To test empirically whether regional developments have an impact on ECB decisions we develop a generalised monetary policy reaction function which allows for an influence of regional divergence. Reaction function estimations and a probit model of interest rate decisions for the first years of the euro area offer some first weak support for an impact of regional divergence. The results clarify that ignoring a potential national perspective may lead to biased estimates for the ECB reaction function.
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Paper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number
110.
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Date of creation: 04 Jun 2003Date of revision:
Handle: RePEc:ecj:ac2003:110Contact details of provider: Web page: http://www.res.org.uk/society/annualconf.asp More information through EDIRC
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Keywords: ECB monetary policy Taylor rule Other versions of this item:
Find related papers by JEL classification: 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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