EconPapers    
Economics at your fingertips  
 

The Taylor Rule: A Useful Monetary Policy Benchmark for the Euro Area?

Gert Peersman () and Frank Smets

International Finance, 1999, vol. 2, issue 1, 85-116

Abstract: This paper explores the Taylor rule--defined as an instrument rule linking the central bank's policy rate to the current inflation rate and the output gap--as a benchmark for analysing monetary policy in the euro area. First, it analyses the stabilization properties of the Taylor rule in a closed economy model of the euro area, estimated using aggregate data from five EU countries. An optimized Taylor rule performs quite well compared to the unconstrained optimal feedback rule. Second, the robustness of these results to estimation error in the output gap and model uncertainty is examined. Copyright 1999 by Blackwell Publishers Ltd.

Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (155) Track citations by RSS feed

Downloads: (external link)
http://www.blackwell-synergy.com/servlet/useragent ... &year=1999&part=null link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
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:bla:intfin:v:2:y:1999:i:1:p:85-116

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1367-0271

Access Statistics for this article

International Finance is currently edited by Benn Steil

More articles in International Finance from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2019-10-07
Handle: RePEc:bla:intfin:v:2:y:1999:i:1:p:85-116