Monetary Policy Reaction Functions: ECB versus Bundesbank
Bernd Hayo () and
Boris Hofmann ()
Macroeconomics from University Library of Munich, Germany
We estimate monetary policy reaction functions for the Bundesbank (1979:4-1998:12) and the European Central Bank (1999:1-2003:7). The Bundesbank regime can be characterised, both before and after German reunification, by an inflation weight of 1.2 and an output weight of 0.4. The estimates for the ECB are 1.2, and 1, respectively. Thus, the ECB, while reacting similarly to expected inflation, puts significantly more weight on stabilising the business cycle than the Bundesbank did.
Keywords: Taylor rule; monetary policy; ECB; Bundesbank (search for similar items in EconPapers)
JEL-codes: E5 (search for similar items in EconPapers)
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Working Paper: Monetary policy reaction functions: ECB versus Bundesbank (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0312007
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