The European Central Bank, the Federal Reserve and the Bank of England: Is the Taylor Rule a useful benchmark for the last decade?
In this article, using a Taylor type rule, I focus on the Euro era and compare the ECB with other two central banks, the Fed and the Bank of England. A very interesting result comes out from the analysis: it seems that these central banks do not observe the inflation course before deciding on the variation of the interest rates. This result can be linked to two ideas: firstly, the use of stationary time series drops out the significance of the inflation gap; secondly, a really forward looking central bank focuses on other macroeconomic leading indicators instead of examining the inflation gap.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 53 (2010)
Issue (Month): 2 ()
|Contact details of provider:|| Postal: Avenue de Beaulieu, 1160 Brussels|
Phone: +322 299 3523
Fax: +322 299 3523
Web page: http://www.eeri.eu/index.htm
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Clarida, R. & Gertler, M., 1996.
"How the Bundesbank Conducts Monetary Policy,"
96-14, C.V. Starr Center for Applied Economics, New York University.
- Florens, C. & Jondeau, E. & Le Bihan, H., 2001.
"Assessing GMM Estimates of the Federal Reserve Reaction Function,"
83, Banque de France.
- Clémentine Florens & Eric Jondeau & Hervé Le Bihan, 2001. "Assessing GMM Estimates of the Federal Reserve Reaction Function," Econometrics 0111003, EconWPA.
- Forte, Antonio, 2009. "The stability of the inflation rate in the Euro area: the role of Globalization and labour market," MPRA Paper 16587, University Library of Munich, Germany.
- Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
- Ignazio Angeloni & Luc Aucremanne & Matteo Ciccarelli, 2006.
"Price setting and inflation persistence: did EMU matter?,"
CEPR;CES;MSH, vol. 21(46), pages 353-387, 04.
- Angeloni, Ignazio & Aucremanne, Luc & Ciccarelli, Matteo, 2006. "Price setting and inflation persistence: did EMU matter?," Working Paper Series 0597, European Central Bank.
- Clausen, Jens R. & Meier, Carsten-Patrick, 2003. "Did the Bundesbank follow a Taylor rule? An analysis based on real-time data," Kiel Working Papers 1180, Kiel Institute for the World Economy (IfW).
- Robert Tchaidze & Alina Carare, 2005.
"The Use and Abuse of Taylor Rules; How Precisely Can We Estimate Them?,"
IMF Working Papers
05/148, International Monetary Fund.
- Robert Tchaidze & Alina Carare, 2004. "The Use and Abuse of Taylor Rules: How precisely can we estimate them?," Econometric Society 2004 Latin American Meetings 132, Econometric Society.
- Alina Carare & Robert Tchaidze, 2008. "The Use and Abuse of Taylor Rules: How Precisely Can We Estimate Them?," Working Papers 006-08, International School of Economics at TSU, Tbilisi, Republic of Georgia.
- Forte, Antonio, 2009.
"The pass-through effect: a twofold analysis,"
16527, University Library of Munich, Germany.
- Giannone, Domenico & Lenza, Michele & Reichlin, Lucrezia, 2007.
"Explaining The Great Moderation: It Is Not The Shocks,"
CEPR Discussion Papers
6600, C.E.P.R. Discussion Papers.
- Domenico Giannone & Michele Lenza & Lucrezia Reichlin, 2008. "Explaining The Great Moderation: It Is Not The Shocks," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 621-633, 04-05.
- Domenico Giannone & Michèle Lenza & Lucrezia Reichlin, "undated". "Explaining the great moderation: it is not the shocks," ULB Institutional Repository 2013/6413, ULB -- Universite Libre de Bruxelles.
- Giannone, Domenico & Lenza, Michele & Reichlin, Lucrezia, 2008. "Explaining the Great Moderation: it is not the shocks," Working Paper Series 0865, European Central Bank.
- Kenneth S. Rogoff, 2003.
"Globalization and global disinflation,"
Federal Reserve Bank of Kansas City, issue Q IV, pages 45-78.
- Kenneth S. Rogoff, 2003. "Globalization and global disinflation," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 77-112.
- Laurence Ball & Robert R. Tchaidze, 2002.
"The Fed and the New Economy,"
American Economic Review,
American Economic Association, vol. 92(2), pages 108-114, May.
- Laurence Ball & Robert R. Tchaidze, 2002. "The Fed and the New Economy," Working Papers 102002, Hong Kong Institute for Monetary Research.
- Laurence Ball & Robert R Tchaidze, 2001. "The Fed and the New Economy," Economics Working Paper Archive 465, The Johns Hopkins University,Department of Economics.
- Laurence Ball & Robert Tchaidze, 2002. "The Fed and the New Economy," NBER Working Papers 8785, National Bureau of Economic Research, Inc.
- Zeno Rotondi & Giacomo Vaciago, 2007. "Lessons from the ECB Experience: Frankfurt Still Matters!," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 36(2), pages 147-170, 07.
- Claudio E. V. Borio & Andrew Filardo, 2007. "Globalisation and inflation: New cross-country evidence on the global determinants of domestic inflation," BIS Working Papers 227, Bank for International Settlements.
- Stephen Cecchetti & Guy Debelle, 2005.
"Has the inflation process changed?,"
BIS Working Papers
185, Bank for International Settlements.
- Janko Gorter & Jan Jacobs & Jakob de Haan, 2007. "Taylor Rules for the ECB using Consensus Data," DNB Working Papers 160, Netherlands Central Bank, Research Department.
- Stefan Gerlach & Katrin Assenmacher-Wesche, 2006.
"Interpreting Euro area inflation at high and low frequencies,"
BIS Working Papers
195, Bank for International Settlements.
- Assenmacher-Wesche, Katrin & Gerlach, Stefan, 2008. "Interpreting euro area inflation at high and low frequencies," European Economic Review, Elsevier, vol. 52(6), pages 964-986, August.
- Assenmacher-Wesche, Katrin & Gerlach, Stefan, 2006. "Interpreting Euro Area Inflation at High and Low Frequencies," CEPR Discussion Papers 5632, C.E.P.R. Discussion Papers.
- Charles Engel, 2009.
"Currency Misalignments and Optimal Monetary Policy: A Re-examination,"
RBA Research Discussion Papers
rdp2009-01, Reserve Bank of Australia.
- Charles Engel, 2011. "Currency Misalignments and Optimal Monetary Policy: A Reexamination," American Economic Review, American Economic Association, vol. 101(6), pages 2796-2822, October.
- Charles Engel, 2009. "Currency Misalignments and Optimal Monetary Policy: A Reexamination," NBER Working Papers 14829, National Bureau of Economic Research, Inc.
- Zeno Rotondi & Giacomo Vaciago, 2007. "Lessons from the ECB experience: Frankfurt still matters!," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0070, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
- David Parsley & Helen Popper, 2009. "Evaluating Exchange Rate Management An Application to Korea," Working Papers 282009, Hong Kong Institute for Monetary Research.
- Gabriele Galati & William R. Melick, 2006. "The evolving inflation process: an overview," BIS Working Papers 196, Bank for International Settlements.
- International Monetary Fund, 2005. "Inflation Targeting and Output Growth; Empirical Evidence for the European Union," IMF Working Papers 05/89, International Monetary Fund.
- Fourçans, André & Vranceanu, Radu, 2002. "ECB Monetary Policy Rule: Some Theory and Empirical Evidence," ESSEC Working Papers DR 02008, ESSEC Research Center, ESSEC Business School.
- Kai Carstensen, 2006.
"Estimating the ECB Policy Reaction Function,"
German Economic Review,
Verein für Socialpolitik, vol. 7, pages 1-34, 02.
- Ullrich, Katrin, 2003. "A Comparison Between the Fed and the ECB: Taylor Rules," ZEW Discussion Papers 03-19, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Gert Schnabel & Stefan Gerlach, 1999. "The Taylor rule and interest rates in the EMU area: a note," BIS Working Papers 73, Bank for International Settlements.
- Stephan Sauer & Jan-Egbert Sturm, 2003. "Using Taylor Rules to Understand ECB Monetary Policy," CESifo Working Paper Series 1110, CESifo Group Munich.
- Richard H. Clarida & Jordi Gali & Mark Gertler, 1998. "Monetary policy rules in practice," Proceedings, Federal Reserve Bank of San Francisco, issue Mar, pages -.
When requesting a correction, please mention this item's handle: RePEc:eei:journl:v:53:y:2010:i:2:p:1-31. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julia van Hove)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.