Monetary Policy Rules in Practice: Some International Evidence

Richard Clarida, Jordi Galí and Mark Gertler

No 6254, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper reports estimates of monetary policy reaction functions for two sets of" countries: the G3 (Germany, Japan, and the U.S.) and the E3 (UK, France that since 1979 each of the G3 central banks has pursued an implicit form of inflation targeting which may account for the broad success of monetary policy in those countries over this time" period. The evidence also suggests that these central banks have been forward looking: they" respond to anticipated inflation as opposed to lagged inflation. As for the E3 emergence of the influenced by German" monetary policy. Further, using the Bundesbank's policy rule as a benchmark time of the EMS collapse, interest rates in each of the E3 countries were much higher than" domestic macroeconomic conditions warranted. Taken all together, the results lend support to" the view that some form of inflation targeting may under certain circumstances be superior to" fixing exchange rates, as a means to gain a nominal anchor for monetary policy."

JEL-codes: E58 F41 (search for similar items in EconPapers)
Date: 1997-11
Note: EFG IFM ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (190)

Published as European Economic Review, Vol. 42 (June 1998): 1033-1067.

Downloads: (external link)
http://www.nber.org/papers/w6254.pdf (application/pdf)

Related works:
Journal Article: Monetary policy rules in practice Some international evidence (1998)
Working Paper: Monetary Policy Rules in Practice: Some International Evidence (1997)
Working Paper: Monetary Policy Rules in Practice: Some International Evidence (1997)
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:nbr:nberwo:6254

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w6254

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().