This paper evaluates the predictive power of different information sets for the European Central Bank(ECB) interest rate setting behavior. We employ an ordered probit model, i.e. a limited dependent variableframework, to take into account the discreteness displayed by policy rate changes. The...

Several authors have documented a reduced variability ofoutput and inflation in the United States since the beginningof the 1980s.1 In fact, a comparison of the 1980:1-2001:2 periodwith the two preceding decades shows that the standarddeviation of quarterly output growth has fallen 30...