Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/20794 
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dc.contributor.authordi Giovanni, Julianen
dc.contributor.authorMcCrary, Justinen
dc.contributor.authorvon Wachter, Tillen
dc.date.accessioned2009-01-28T16:16:49Z-
dc.date.available2009-01-28T16:16:49Z-
dc.date.issued2005-
dc.identifier.urihttp://hdl.handle.net/10419/20794-
dc.description.abstractForward-looking behavior on the part of the monetary authority leads least squares estimatesto understate the true growth consequences of monetary policy interventions. We presentinstrumental variables estimates of the impact of interest rates on real output growth forseveral European countries, using German interest rates as the instrument. We compare thisidentification strategy to the vector autoregression approach, and give an interpretation of ourestimates that is appropriate in a dynamic context. Moreover, we show that the differencebetween least squares and instrumental variables estimates provides bounds for the degreeof endogeneity in monetary policy. The results confirm a considerable downward bias ofestimates that do not account for potential forward-looking monetary policy decisions. Thebias is higher for countries whose monetary policy was more independent of Germany.en
dc.language.isoengen
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonnen
dc.relation.ispartofseries|aIZA Discussion Papers |x1495en
dc.subject.jelJ60en
dc.subject.jelE52en
dc.subject.ddc330en
dc.subject.keywordmonetary policyen
dc.subject.keywordforward looking biasen
dc.subject.keywordinstrumental variablesen
dc.subject.stwGeldpolitiken
dc.subject.stwZinspolitiken
dc.subject.stwDeutschen
dc.subject.stwKonjunkturzusammenhangen
dc.subject.stwErwartungstheorieen
dc.subject.stwSchätzungen
dc.subject.stwEU-Staatenen
dc.subject.stwDeutschlanden
dc.titleFollowing Germany's Lead : Using International Monetary Linkages to Identify the Effect of Monetary Policy on the Economy-
dc.typeWorking Paperen
dc.identifier.ppn481440070en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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