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Five Years Of Single European Monetary Policy In Practice: Is The Ecb Rule‐Based?

Author

Listed:
  • RALF M. FENDEL
  • MICHAEL R. FRENKEL

Abstract

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)

Suggested Citation

  • Ralf M. Fendel & Michael R. Frenkel, 2006. "Five Years Of Single European Monetary Policy In Practice: Is The Ecb Rule‐Based?," Contemporary Economic Policy, Western Economic Association International, vol. 24(1), pages 106-115, January.
    • Handle: RePEc:bla:coecpo:v:24:y:2006:i:1:p:106-115
    DOI: 10.1093/cep/byj002
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    References listed on IDEAS

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    1. Bernd Hayo & Boris Hofmann, 2006. "Comparing monetary policy reaction functions: ECB versus Bundesbank," Empirical Economics, Springer, vol. 31(3), pages 645-662, September.
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    5. Henderson, Dale W. & McKibbin, Warwick J., 1993. "A comparison of some basic monetary policy regimes for open economies: implications of different degrees of instrument adjustment and wage persistence," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 221-317, December.
    6. Ben S. Bernanke & Julio J. Rotemberg (ed.), 1997. "NBER Macroeconomics Annual 1997," MIT Press Books, The MIT Press, edition 1, volume 1, number 026252242x, December.
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    8. Fourcans, Andre & Vranceanu, Radu, 2004. "The ECB interest rate rule under the Duisenberg presidency," European Journal of Political Economy, Elsevier, vol. 20(3), pages 579-595, September.
    9. Clarida, Richard & Gali, Jordi & Gertler, Mark, 1998. "Monetary policy rules in practice Some international evidence," European Economic Review, Elsevier, vol. 42(6), pages 1033-1067, June.
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    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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