Standard Taylor rules revisited: A cross country study for European countries

Sabine Eschenhof

No 196, Darmstadt Discussion Papers in Economics from Darmstadt University of Technology, Department of Law and Economics

Abstract: In this paper we want to estimate basic Taylor rules with a cross country study approach for European countries before the reorganization of the system of central banks. We compare basic and extended Taylor rules to give a hint if the exchange rate plays a significant role in the decision making of monetary policy. Fixed Effects, GMM and SGMM estimators are used to check for robustness. The obtained results adumbrate that there may be an influence of exchange rate changes on the monetary policy decision making process but the results are not fully robust and deliver only a weak tendency.

Keywords: Cross Country Study; Taylor Rules; Exchange Rate; FE Estimation; SGMM Estimation (search for similar items in EconPapers)
JEL-codes: C32 E52 F31 (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:darddp:dar_40391

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