Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/17905
Authors: 
Stolz, Stéphanie
Gottschalk, Jan
Year of Publication: 
2001
Series/Report no.: 
Kiel Working Paper 1057
Abstract: 
We examine the indicator property of the monetary indicator for inflation. Using a P*-model, Svensson shows theoretically in a recent paper that the relationship between these two variables is rather tenuous. The present study employs empirical evidence on the relations in his model to quantify its dynamics for the euro area. Moreover, we extend Svensson's analysis by considering different shocks and monetary regimes. It becomes apparent that the system exhibits complicated dynamics and that for most shocks and policy regimes the monetary indicator is not a leading indicator of dangers to price stability in the medium term.
Subjects: 
Monetary Targeting
Inflation Targeting
Euro Area
JEL: 
E51
E52
Document Type: 
Working Paper

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