ECB Monetary Policy Rule: Some Theory and Empirical Evidence

Andre Fourcans () and Radu Vranceanu

No DR 02008, ESSEC Working Papers from ESSEC Research Center, ESSEC Business School

Abstract: This paper estimates different monetary policy rules for the ECB with montly data during the period 1999.04-2002.02. The results show that the ECB exhibits a rather conservative behavior: a 1 percentage point increase in the inflation rate above its target brings about a 1,2 percentage point increase in the interest rate. Like the FED, its policy is influenced by real activity. The Bank also smoothes changes in interest rates over time. Despite the announced money growth "reference value", it does not reacts to changes in M3 growth rates.

Keywords: ECB; Taylor'srule; monetary policy; inflation (search for similar items in EconPapers)
JEL-codes: C51 E52 E58 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2002-08
New Economics Papers: this item is included in nep-mac, nep-mfd and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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