Eurosystem Monetary Targeting: Lessons from US Data

Lars Svensson and Glenn Rudebusch

No 2522, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Using a small empirical model of inflation, output, and money estimated on US data, we compare the relative performance of monetary targeting and inflation targeting. The results show that monetary targeting would be quite inefficient, with both higher inflation and output variability. This is true even with a nonstochastic money demand formulation. Our results are also robust to using a P* model of inflation. Therefore, in these popular frameworks, there is no support for the prominent role given to money growth in the Eurosystem's monetary policy strategy.

Keywords: Inflation targeting; Monetary targeting; Ecb (search for similar items in EconPapers)
JEL-codes: E42 E52 E58 (search for similar items in EconPapers)
Date: 2000-08
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Citations: View citations in EconPapers (23)

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Related works:
Journal Article: Eurosystem monetary targeting: Lessons from U.S. data (2002)
Working Paper: Eurosystem monetary targeting: lessons from U.S. data (1999)
Working Paper: Eurosystem Monetary Targeting: Lessons from U.S. Data (1999)
Working Paper: Eurosystem Monetary Targeting: Lessons from U.S. Data (1999)
Working Paper: Eurosystem Monetary Targeting: Lessons from U.S. Data (1999)
Working Paper: Eurosystem Monetary Targeting: Lessons from U.S. Data (1999)
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