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The European Central Bank: Decision Rules and Macroeconomic Performance


  • Paul Degrauwe
  • Hans Dewachter
  • Yunus Aksoy


In this paper we analyze the effects of different decision rules in the ECB on monetary stability. We consider a model where asymmetric shocks and divergent propagation of shocks on output and inflation are potential causes of tensions within the ECB concerning the conduct of monetary (interest rate) policy. Given divergence of desired interest rates (due to the asymmetries) we analyze the effect of different voting procedures within the Governing Council of the ECB. Welfare implications are discussed.

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  • Paul Degrauwe & Hans Dewachter & Yunus Aksoy, 1998. "The European Central Bank: Decision Rules and Macroeconomic Performance," Working Papers Department of Economics ces9834, KU Leuven, Faculty of Economics and Business, Department of Economics.
  • Handle: RePEc:ete:ceswps:ces9834

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    5. S. Proost & D. Regemorter, 1995. "The double dividend and the role of inequality aversion and macroeconomic regimes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 207-219, August.
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    7. Schob, Ronnie, 1996. "Evaluating Tax Reforms in the Presence of Externalities," Oxford Economic Papers, Oxford University Press, vol. 48(4), pages 537-555, October.
    8. Lawrence Goulder, 1995. "Environmental taxation and the double dividend: A reader's guide," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 157-183, August.
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    Cited by:

    1. Vaubel, Roland, 1999. "The Future of the Euro : A Public Choice Perspective," Discussion Papers 570, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
    2. Hamza Bennani, 2012. "National influences inside the ECB: an assessment from central bankers' statements," Working Papers hal-00992646, HAL.
    3. Paul De Grauwe & Hans Dewachter & Yunus Aksoy, 1999. "Effectiveness of Monetary Policy in Euroland," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 26(4), pages 299-318, December.
    4. Blanca SANCHEZ-ROBLES & Adolfo MAZA FERNANDEZ, "undated". "An Attempt to Modelize the ECB Monetary Policy," EcoMod2004 330600124, EcoMod.
    5. Lucio Valerio Spagnolo & Mario Cerrato, 2005. "No euro please, We’re British!," CELPE Discussion Papers 95, CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy.

    More about this item

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission


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