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Investigating the monetary policy of central banks with assessment indicators

Listed author(s):
  • Bluhm, Marcel
Registered author(s):

    This paper proposes a new approach to use qualitative information for investigating central banks' monetary policy strategy. Quantitative assessment indicators which are generated from a central bank's public statement with the balance statistic method are used to estimate Taylor-type rules. This procedure allows to directly capture a policymaker's assessment of macroeconomic variables which are relevant for the decision making process. As an application of the proposed method, a novel real time data set consisting of assessment indicators for the Bundesbank is generated to re-investigate its monetary policy. The analysis provides evidence that (i) the Bundesbank was a flexible monetary targeter and (ii) that the proposed indicator variables contain information beyond that of standard macroeconomic variables used in monetary policy analysis.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0176268015000233
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    Article provided by Elsevier in its journal European Journal of Political Economy.

    Volume (Year): 38 (2015)
    Issue (Month): C ()
    Pages: 181-196

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    Handle: RePEc:eee:poleco:v:38:y:2015:i:c:p:181-196
    DOI: 10.1016/j.ejpoleco.2015.03.001
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505544

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