Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153093
Authors: 
Eleftheriou, Maria
Gerdesmeier, Dieter
Roffia, Barbara
Year of Publication: 
2006
Series/Report no.: 
ECB Working Paper 659
Abstract: 
Despite the great importance and final success of the convergence process that led to the establishment of the European Monetary Union, there is no clear agreement regarding the monetary policy pursued in the member countries during the convergence process. This paper contributes to the literature with an empirical analysis of the period from 1993 to 1998 that encompasses eleven EMU countries. In particular, Taylor type interest rate rules are estimated with monthly national data to find that, despite certain similarities and exceptions, the rule followed by each country is distinct and differs substantially from the standard Taylor rule. However, for most countries, the parameter estimates reflect the principles proclaimed by the monetary policy authorities and, in addition, it is shown that in most cases the estimated rules reproduce the policy setting quite closely.
Subjects: 
ERM
monetary policy
output gap
Taylor rule
JEL: 
E58
F41
Document Type: 
Working Paper
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