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dc.contributor.authordi Giovanni, Julianen_US
dc.contributor.authorMcCrary, Justinen_US
dc.contributor.authorvon Wachter, Tillen_US
dc.coverage.temporal1973-1998en_US
dc.date.accessioned2009-01-28T16:16:49Z-
dc.date.available2009-01-28T16:16:49Z-
dc.date.issued2005en_US
dc.identifier.urihttp://hdl.handle.net/10419/20794-
dc.description.abstractForward-looking behavior on the part of the monetary authority leads least squares estimates to understate the true growth consequences of monetary policy interventions. We present instrumental variables estimates of the impact of interest rates on real output growth for several European countries, using German interest rates as the instrument. We compare this identification strategy to the vector autoregression approach, and give an interpretation of our estimates that is appropriate in a dynamic context. Moreover, we show that the difference between least squares and instrumental variables estimates provides bounds for the degree of endogeneity in monetary policy. The results confirm a considerable downward bias of estimates that do not account for potential forward-looking monetary policy decisions. The bias is higher for countries whose monetary policy was more independent of Germany.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesIZA Discussion paper series 1495en_US
dc.subject.jelJ60en_US
dc.subject.jelE52en_US
dc.subject.ddc330en_US
dc.subject.keywordmonetary policyen_US
dc.subject.keywordforward looking biasen_US
dc.subject.keywordinstrumental variablesen_US
dc.subject.stwGeldpolitiken_US
dc.subject.stwZinspolitiken_US
dc.subject.stwDeutschen_US
dc.subject.stwKonjunkturzusammenhangen_US
dc.subject.stwErwartungstheorieen_US
dc.subject.stwSch├Ątzungen_US
dc.subject.stwEU-Staatenen_US
dc.subject.stwDeutschlanden_US
dc.titleFollowing Germany's Lead : Using International Monetary Linkages to Identify the Effect of Monetary Policy on the Economyen_US
dc.typeWorking Paperen_US
dc.identifier.ppn481440070en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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