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Did the Bundesbank Target Monetary Expansion or Inflation? Evidence from Monetary Base Growth

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  • Galina Boeva
  • Roland Vaubel

Abstract

Several empirical studies have suggested that the Bundesbank has pursued inflation targets rather than monetary targets. We find that, in the period from 1979 III to 1998 IV, changes in adjusted monetary base growth reacted negatively and significantly to deviations from target monetary expansion as measured relative to the nearest margin of the target band if, and only if, no control variables are added. By contrast, deviations of the inflation rate from the inflation objective used to derive the money supply target never had any significant effect on changes in adjusted monetary base growth.

Suggested Citation

  • Galina Boeva & Roland Vaubel, 2012. "Did the Bundesbank Target Monetary Expansion or Inflation? Evidence from Monetary Base Growth," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 148(III), pages 439-447, September.
    • Handle: RePEc:ses:arsjes:2012-iii-3
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    References listed on IDEAS

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    More about this item

    Keywords

    Deutsche Bundesbank; monetary policy; money supply targets; inflation targets;
    All these keywords.

    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
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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