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Monetary policy in Europe vs the US: what explains the difference?

  • Harald Uhlig

This paper compares monetary policy in the US and EMU during the last decade, employing an estimated hybrid New Keynesian cash-in-advance model, driven by five shocks. It appears that the difference between the two monetary policies between 1998 and 2006 is due to both surprises in productivity as well as surprises in wage demands, moving interest rates in opposite directions in Europe and the US, but not due to a more sluggish response in Europe to the same shocks or to different monetary policy surprises.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14996.

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Date of creation: May 2009
Date of revision:
Publication status: published as Monetary Policy in Europe versus the United States: What Explains the Difference? , Harald Uhlig. in International Dimensions of Monetary Policy , Galí and Gertler. 2009
Handle: RePEc:nbr:nberwo:14996
Note: EFG ME
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