The European Central Bank, the Federal Reserve and the Bank of England: Is the Taylor Rule a useful benchmark for the last decade?

Antonio Forte

Journal of Economics and Econometrics, 2010, vol. 53, issue 2, 1-31

Abstract: In this article, using a Taylor type rule, I focus on the Euro era and compare the ECB with other two central banks, the Fed and the Bank of England. A very interesting result comes out from the analysis: it seems that these central banks do not observe the inflation course before deciding on the variation of the interest rates. This result can be linked to two ideas: firstly, the use of stationary time series drops out the significance of the inflation gap; secondly, a really forward looking central bank focuses on other macroeconomic leading indicators instead of examining the inflation gap.

Keywords: Taylor rule; European Central Bank; Federal Reserve; Bank of England. (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (4)

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Working Paper: The European Central Bank, the Federal Reserve and the Bank of England: is the Taylor Rule an useful benchmark for the last decade? (2009)
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