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Some empirical evidence of the euro area monetary policy

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  • Forte, Antonio

Abstract

In this paper I try to find some empirical evidence of the European Central Bank’s behaviour from its outset, January 1999, to the mid 2007, using a Taylor-type rule. I test a new and simple method for estimating the output gap in order to avoid problems linked with the estimate of the potential output. Moreover, I analyse the significance of some explanatory variables in order to understand what the basis of the E.C.B. monetary policy decisions are. Finally, I find an important evidence of the role of the Euro-Dollar nominal exchange rate in the conduct of the Euro Area monetary policy.

Suggested Citation

  • Forte, Antonio, 2010. "Some empirical evidence of the euro area monetary policy," MPRA Paper 21785, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:21785
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    File URL: https://mpra.ub.uni-muenchen.de/21785/1/MPRA_paper_21785.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Mark Gertler & Jordi Gali & Richard Clarida, 1999. "The Science of Monetary Policy: A New Keynesian Perspective," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1661-1707, December.
    3. Stephen G. Cecchetti & Guy Debelle, 2006. "Has the inflation process changed?," Economic Policy, CEPR;CES;MSH, vol. 21(46), pages 311-352, April.
    4. Ball, Laurence, 1999. "Efficient Rules for Monetary Policy," International Finance, Wiley Blackwell, vol. 2(1), pages 63-83, April.
    5. Kai Carstensen, 2006. "Estimating the ECB Policy Reaction Function," German Economic Review, Verein für Socialpolitik, vol. 7, pages 1-34, February.
    6. Mark Gertler & Jordi Gali & Richard Clarida, 1999. "The Science of Monetary Policy: A New Keynesian Perspective," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1661-1707, December.
    7. Richard H. Clarida & Jordi Gali & Mark Gertler, 1998. "Monetary policy rules in practice," Proceedings, Federal Reserve Bank of San Francisco, issue Mar.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Taylor Rule; European Central Bank; Euro-Dollar exchange rate;

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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