EconStor >
Hamburgisches WeltWirtschaftsInstitut (HWWI) >
HWWI Research Papers, Hamburgisches WeltWirtschaftsInstitut >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/48264
  
Title:Effective monetary policy conservatism: A comparison of 11 OECD countries PDF Logo
Authors:Berlemann, Michael
Hilscher, Kai
Issue Date:2010
Series/Report no.:HWWI Research paper 2-21
Abstract:Modern monetary economists argue that institutional aspects such as central bank independence and central bank conservatism play an important role for the performance of an economy. In order to be able to compare the effects of different institutions it is necessary to measure both central bank independence and conservatism. In this paper we propose a new methodology of uncovering the degree of effective monetary policy conservatism from observed central bank behavior. Employing a variant of the Barro-Gordon-model we derive an optimal prime rate reaction function and show that more effectively conservative monetary policy tends to react less active to shocks to the real economy. In order to illustrate the proposed methodology we then estimate a common prime rate reaction function for a sample of 11 central banks in a panel setting and allow the reaction to real disturbances to differ between countries.
JEL:F21
F23
O55
Document Type:Working Paper
Appears in Collections:HWWI Research Papers, Hamburgisches WeltWirtschaftsInstitut

Files in This Item:
File Description SizeFormat
642927960.pdf701.94 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/48264

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.