Interest Rate Pass-Through, Monetary Policy Rules and Macroeconomic Stability

Claudia Kwapil and Johann Scharler
Additional contact information
Claudia Kwapil: Oesterreichische Nationalbank
Johann Scharler: Oesterreichische Nationalbank

No 65, Money Macro and Finance (MMF) Research Group Conference 2006 from Money Macro and Finance Research Group

Abstract: In this paper we analyze equilibrium determinacy in a sticky price model in which the pass-through from policy rates to retail interest rates is sluggish and potentially incomplete. In addition, we empirically characterize and compare the interest rate pass-through process in the euro area and the U.S. We find that if the pass-through is incomplete in the long run, the standard Taylor principle is insufficient to guarantee equilibrium determinacy. Our empirical analysis indicates that this result might be particularly relevant for bank-based financial systems as for instance that in the euro area.

Keywords: Interest Rate Pass-Through; Equilibrium Determinacy; Stability (search for similar items in EconPapers)
JEL-codes: E32 E52 E58 (search for similar items in EconPapers)
Date: 2007-02-02
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://repec.org/mmf2006/up.32722.1145350370.pdf (application/pdf)

Related works:
Journal Article: Interest rate pass-through, monetary policy rules and macroeconomic stability (2010)
Working Paper: Interest Rate Pass-Through, Monetary Policy Rules and Macroeconomic Stability (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mmf:mmfc06:65

Access Statistics for this paper

More papers in Money Macro and Finance (MMF) Research Group Conference 2006 from Money Macro and Finance Research Group
Bibliographic data for series maintained by Christopher F. Baum ().