The paper analyses the performance of simple interest rate rules which feature a response to noisy observations of inflation, output and money growth. The analysis is based on a small empirical model of the hybrid New Keynesian type which has been estimated on euro area data by Stracca (2007)....

The book considers issues relevant to the European Central Bank in refining and communicating its strategy. It offers a historical assessment of the Bundesbank's strategy of monetary targeting conducted from 1974 to 1998. In contrast to several other prominent studies it is argued that money...

Since central banks have limited information concerning the transmission channel of monetary policy, they are faced with the difficult task of simultaneously controlling the policy target and estimating the impact of policy actions. A tradeoff between estimation and control arises because policy...

We estimate forward-looking interest-rate rules for five large OECD economies, allowing for time variation in the responses to macroeconomic conditions and in the variance of the policy rate. Conventional constant-parameter reaction functions likely blur the impact of i) model uncertainty, ii)...

Die Geldmenge war die Zielgröße der Deutschen Bundesbank bis Ende des Jahres 1998. Die Zentralbank versuchte mit der quantiativen Festlegung dieser Zielgröße der Öffentlichkeit mitzuteilen, welchen geldpolitischen Kurs sie verfolgte. Das vorliegende Arbeitspapier erörtert die Frage,...

New-Keynesian macroeconomic models typically assume that any long-run trade-off between inflation and unemployment is ruled out. While this appears to be a reasonable characterization of the US economy, it is less clear that the natural rate hypothesis necessarily holds in a European country...