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What Does “Below, But Close to, Two Percent” Mean? Assessing the Ecb's Reaction Function with Real Time Data

Paloviita, Maritta - 2019

We estimate the ECB's monetary policy reaction function by using real time Eurosystem/ECB staff macroeconomic projection data, which are presented to the ECB's Governing Council when it assesses the monetary policy stance in the euro area. Alternative specifications of the reaction function...

Persistent link: https://www.econbiz.de/10012900912

Nonlinear monetary policy rules : an essay in the comparative study on Egyptian and Tunisian central banks

Baaziz, Yosra; Labidi, Moez - In: Economies : open access journal 4 (2016) 2, pp. 1-18

The purpose of this paper is to evaluate the behavior of monetary authorities in Tunisia and Egypt, in response to changes in macroeconomic variables over time based on LSTR model. In this sense, we estimate Taylor-type equations for short-term interest rate in Tunisia and Egypt using quarterly...

Persistent link: https://www.econbiz.de/10011499480

Interest rate persistence and monetary policy rule in light of model uncertainty

Yin, Shou-Yung; Lin, Chang-Ching; Chang, Ming-Jen - In: German economic review : GER 24 (2023) 2, pp. 145-190

Persistent link: https://www.econbiz.de/10014288261

Money-Based Interest Rate Rules : Lessons from German Data

Gerberding, Christina - 2016

The paper derives the monetary policy reaction function implied by money growth targeting. It consists of an interest rate response to deviations of the inflation rate from target, to the change in the output gap, to money demand shocks and to the lagged interest rate. In the second part, it is...

Persistent link: https://www.econbiz.de/10012991152

An interest rate rule to uniquely implement the optimal equilibrium in a liquidity trap

Duarte, Fernando; Zabai, Anna - 2015

We propose a new interest rate rule that implements the optimal equilibrium and eliminates all indeterminacy in a canonical New Keynesian model in which the zero lower bound on nominal interest rates (ZLB) is binding. The rule commits to zero nominal interest rates for a length of time that...

Persistent link: https://www.econbiz.de/10011346620

How to escape a liquidity trap with interest rate rules

Duarte, Fernando - 2016

I give necessary and sufficient conditions under which interest-rate feedback rules eliminate aggregate instability by inducing a globally unique optimal equilibrium in a canonical New Keynesian economy with a binding zero lower bound. I consider a central bank that initially keeps interest...

Persistent link: https://www.econbiz.de/10011477354

Forecasting euro area inflation using targeted predictors : is money coming back?

Falagiarda, Matteo; Sousa, João - 2017

relative to other predictors generally improving in the post-2012 period. An out-of-sample forecasting exercise indicates that …, when monetary and credit aggregates are loaded directly in the forecasting equation, the additional gains over the … and credit variables in forecasting inflation, even if their information content is diluted in a much broader pool of …

Persistent link: https://www.econbiz.de/10011637074

Simple Interest Rate Rules with a Role for Money

Scharnagl, Michael - 2016

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)....

Persistent link: https://www.econbiz.de/10012991255

Interest rate setting and communication at the ECB

Cour, Philippine; Jung, Alexander - 2020

Based on ordered Probit models and twenty years of euro area data, we estimate empirical reaction functions for the ECB's monetary policy and augment them with communication indicators. First, we find that the ECB responded to risks to price stability in line with its primary objective, and that...

Persistent link: https://www.econbiz.de/10012244764

Forward-Looking Behavior and the Optimality of the Taylor Rule

Lansing, Kevin J.; Trehan, Bharat - 2001

some assumptions about forward-looking behavior that are motivated by economic theory, we show that a plausible set of …

Persistent link: https://www.econbiz.de/10014134690