The introduction of inflation targets in Canada in 1991 ostensibly clarified the objectives of monetary policy, namely the pursuit of price stability. In doing so, one of the objectives of the new policy was to ensure that the public would henceforth be able to assess more easily monetary policy...

This paper estimates standard and extended Taylor rules for core countries in the euro area, namely France, Germany and Italy, as well as for the ECB. Forward, backward and forecast-based rules are estimated for a variety of samples since the late 1970s. We are particularly interested in the...

In this paper, we investigate the relationship between stock returns and short-term interest rates. Identification of the stock return-interest rate relation is solved by using a new technique that relies on the heteroskedasticity of shocks to stock market returns. We suggest some improvements...