Monetary Policy Coordination: A New Empirical Approach

Oscar Jorda and Paul Bergin

No 313, Working Papers from University of California, Davis, Department of Economics

Abstract: This paper examines the degree of monetary policy coordination between major industrialized countries from a completely new perspective. The analysis uses a new data set on central bank issued interest rate targets for 14 OECD countries. The methodology that we use decomposes the notion of coordination into two components: (1) Do countries coordinate the timing of their monetary policy actions? and (2) Is there coordination in the direction in which targets are changed? The answers to these two questions are based on a newly developed dynamic discrete duration model (the autoregressive conditional hazard model or ACH) and on an ordered response model in event time. The results indicate there is significant policy coordination among these 14 countries during the 1980-1998 sample period in contrast to recent theoretical work suggesting that gains to coordination are small. Moreover, this coordination appears to work through channels other than documented coordination agreements.

Keywords: monetary policy; international coordination; interest rate targets (search for similar items in EconPapers)
JEL-codes: E58 F42 F47 (search for similar items in EconPapers)
Pages: 44
Date: 2003-01-15
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://repec.dss.ucdavis.edu/files/k22u3ewgjQnHYG71vgzZhRRf/01-2.pdf (application/pdf)

Related works:
Working Paper: Monetary Policy Coordination: A New Empirical Approach
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:cda:wpaper:313

Access Statistics for this paper

More papers in Working Papers from University of California, Davis, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Letters and Science IT Services Unit ().