The tress of having a single monetary policy in Europe

Arbeitspapier

This paper estimates forward-looking Taylor rules for the euro area. Using the asymmetries in inflation and cyclical output developments across countries, we investigate the adequacy of the single monetary policy for each of the EuropeanMonetary Union (EMU) member countries. Notable differences emerge across the countries. Taking a euro area perspective, we also show that it depends upon the underlying country weighting scheme in the monetary decision process of the ECB whether or not there has been a synchronisation of business and inflation cycles among the EMU member countries over the years. Finally, we produce an estimate of the actual policy weights the ECB has implicitly attached to each of the member countries. Developments in small member countries have received more than proportional weights in actual monetary policy decisions of the ECB.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: KOF Working Papers ; No. 190

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes ; Business Fluctuations; Cycles ; Monetary Policy ; Central Banks and Their Policies
• Subject: Taylor rule ; monetary policy ; ECB ; stress ; business cycle synchronisation ; Taylor-Regel ; Geldpolitik ; Europäische Wirtschafts- und Währungsunion ; Konjunkturzusammenhang ; EU-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sturm, Jan-Egbert ; Wollmershäuser, Timo
• Event: Veröffentlichung
• (who): ETH Zurich, KOF Swiss Economic Institute
• (where): Zurich
• (when): 2008

Further information

• DOI: doi:10.3929/ethz-a-005552299
• Handle: http://hdl.handle.net/10419/50373
• Last update: 10.03.2025, 11:43 AM CET