IDEAS home Printed from https://ideas.repec.org/a/wly/ijfiec/v23y2018i1p41-46.html
   My bibliography  Save this article

Now and always, the relevance of the Taylor rule in Europe

Author

Listed:
  • Rodrigo Caputo
  • Agustín Díaz

Abstract

We find that, after the adoption of the euro, the European Central Bank has followed a forward†looking Taylor rule. This rule is such that nominal as well as real short†term interest rates increase in response to higher expected inflation or decline in output. Our findings show that the European Central Bank policy responses are of the same magnitude and sign as the ones prevailing in the pre†euro era for Germany, France, and Italy. We conclude that, before and after the euro, central banks in Europe have adopted a proactive stance towards controlling inflation.

Suggested Citation

  • Rodrigo Caputo & Agustín Díaz, 2018. "Now and always, the relevance of the Taylor rule in Europe," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 23(1), pages 41-46, January.
    • Handle: RePEc:wly:ijfiec:v:23:y:2018:i:1:p:41-46
    DOI: 10.1002/ijfe.1601
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/ijfe.1601
    Download Restriction: no
    File URL: https://libkey.io/10.1002/ijfe.1601?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hasan Engin Duran & Pawe³ Gajewski, 2023. "State-level Taylor rule and monetary policy stress," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 18(1), pages 89-120, March.
    2. Markus Hertrich, 2019. "A Novel Housing Price Misalignment Indicator for Germany," German Economic Review, Verein für Socialpolitik, vol. 20(4), pages 759-794, November.
    3. Badarau, Cristina & Huart, Florence & Sangaré, Ibrahima, 2021. "Macroeconomic and policy implications of eurobonds," International Review of Law and Economics, Elsevier, vol. 65(C).
    4. Dahmene, Meriam & Boughrara, Adel & Slim, Skander, 2021. "Nonlinearity in stock returns: Do risk aversion, investor sentiment and, monetary policy shocks matter?," International Review of Economics & Finance, Elsevier, vol. 71(C), pages 676-699.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:ijfiec:v:23:y:2018:i:1:p:41-46. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.interscience.wiley.com/jpages/1076-9307/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.