Bletzinger, Τ., Wieland, V., (2013), “Low for how long? Estimating the ECB’s “Extended Period of Time”, www.voxeu.com, 5 Σεπτεμβρίου.
The ECB has promised to keep interest rates low for an “extended period of time”. In a broad hint to the profession, President Draghi stressed a reasonable forecast of this period could be extracted from a monetary policy reaction function. This column presents one such forecast based on published macro forecasts and a reaction function that fits the ECB’s past behaviour. The result is that ECB interest rates will rise by May 2014 at the latest.