Arbeitspapier
How the ECB and US Fed set interest rates
Monetary policies of the ECB and US Fed can be characterised by Taylor rules, that is both central banks seem to be setting rates by taking into account the output gap and inflation. We also set up and tested Taylor rules which incorporate money growth and the euro-dollar exchange rate, thereby improving the fit between actual and Taylor rule based rates. In general, Taylor rules appear to be a much better way of describing Fed policy than ECB policy. Simulations suggest that the ECB's short-term interest rates have been at a much lower level in the last two years compared with what a Taylor rule would suggest.
- Language
-
Englisch
- Bibliographic citation
-
Series: HfB - Working Paper Series ; No. 72
- Classification
-
Wirtschaft
Interest Rates: Determination, Term Structure, and Effects
Central Banks and Their Policies
- Subject
-
European Central Bank
Federal Reserve
Monetary policy
Taylor rule
- Event
-
Geistige Schöpfung
- (who)
-
Belke, Ansgar
Polleit, Thorsten
- Event
-
Veröffentlichung
- (who)
-
HfB - Business School of Finance & Management
- (where)
-
Frankfurt a. M.
- (when)
-
2006
- Handle
- URN
-
urn:nbn:de:101:1-2008082788
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Belke, Ansgar
- Polleit, Thorsten
- HfB - Business School of Finance & Management
Time of origin
- 2006
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