Controlling Inflation in Euroland
AbstractFor the sake of credibility the ECB has to commit to a clear policy strategy - a direct inflation target or an intermediate monetary target. We offer some information on the scale of control and indicator problems associated with both strategies. We estimate the links between monetary policy actions and inflation in dynamic linear models with the Kalman filter. Using European M3 that the ECB has published recently, we find that the overall control problems involved in targeting money are larger than for direct inflation targets.
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Bibliographic InfoPaper provided by Hamburg University, Department of Economics in its series Quantitative Macroeconomics Working Papers with number 20102.
Length: 16 pages
Date of creation: Feb 2001
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More information through EDIRC
Monetary Policy; Time-Varying Parameter Models; Inflation Targeting;
Other versions of this item:
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
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