EconPapers    
Economics at your fingertips  
 

Monetary information and monetary policy decisions: Evidence from the euroarea and the UK

Thanaset Chevapatrakul, Tae-Hwan Kim () and Paul Mizen ()

Journal of Macroeconomics, 2012, vol. 34, issue 2, 326-341

Abstract: This paper uses a modified New Keynesian framework to consider the use of monetary information in making monetary policy decisions. We add monetary indicators derived from theoretical models to conventional economic variables in an instrument rule and estimate the equations using euroarea and UK data recognizing that interest rates are set discretely. There is an improvement in the ability to predict changes in interest rates when we introduce monetary indicators which is robust to alternative model specifications. This result adds to a growing literature on the role of monetary indicators showing that this information helps predict interest rate decisions as well as inflation.

Keywords: Monetary policy rules; Money; Quantity theory; European Central Bank; Bank of England (search for similar items in EconPapers)
JEL-codes: E31 E41 E43 E52 E58 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0164070412000043
Full text for ScienceDirect subscribers only

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:eee:jmacro:v:34:y:2012:i:2:p:326-341

Access Statistics for this article

Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos

More articles in Journal of Macroeconomics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-09-12
Handle: RePEc:eee:jmacro:v:34:y:2012:i:2:p:326-341