Controlling Inflation in Euroland

Karen Cabos () and Nikolaus A Siegfried

Quantitative Macroeconomics Working Papers from Hamburg University, Department of Economics

Abstract: For the sake of credibility the ECB has to commit to a clear policy strategy - a direct inflation target or an intermediate monetary target. We offer some information on the scale of control and indicator problems associated with both strategies. We estimate the links between monetary policy actions and inflation in dynamic linear models with the Kalman filter. Using European M3 that the ECB has published recently, we find that the overall control problems involved in targeting money are larger than for direct inflation targets.

Keywords: Monetary Policy; Time-Varying Parameter Models; Inflation Targeting (search for similar items in EconPapers)
JEL-codes: C22 C53 E52 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2001-02
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Citations: View citations in EconPapers (1)

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Journal Article: Controlling inflation in Euroland (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ham:qmwops:20102

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