Milas, Costas; Martin, Christopher; Kharel, Ram Sharan - Rimini Centre for Economic Analysis (RCEA) - 2007
We estimate a flexible non-linear monetary policy rule for the UK to examine the response of policymakers to the real exchange rate. We have three main findings. First, policymakers respond to real exchange rate misalignment rather than to the real exchange rate itself. Second, policymakers...