Darvas, Z. and Merler, S., (2013), “-15% to +4%: Taylor-rule interest rates for euro area countries”, Bruegel, 18 Σεπτεμβρίου.
Does one size fit all? Before the crisis, there was a major debate on whether the single interest rate set by the European Central Bank (ECB) would be suitable for all members of the euro area, which have diverse economic conditions. The debate became quieter since the euro-crisis, as there is now widespread recognition that this is not the case. Moreover, financial fragmentation, which has emerged with the crisis, made things even worse.
There is an extensive academic research on monetary policy rules and it is frequently found that a rather simple Taylor-rule, which prescribes the central bank interest rate as a function of inflation and a measure of economic activity, describes reasonably well actual central bank interest rates developments.
Σχετικές Αναρτήσεις
- Bletzinger, Τ., Wieland, V., (2013), “Low for how long? Estimating the ECB’s “Extended Period of Time”, www.voxeu.com, 5 Σεπτεμβρίου.
- Ciccarelli, M., Maddaloni, Ang., Peydró, J-L., (2013), “Heterogeneous transmission mechanism: monetary policy and financial fragility in the Eurozone”, Economic Policy, Vol. 28, Issue 75, pp. 459-512.