Monetary Policy Rules : The experience of Germany, Netherlands and France
Part of : Αρχείον οικονομικής ιστορίας ; Vol.XIV, No.2, 2002, pages 99-129
Issue:
Pages:
99-129
Author:
Abstract:
Based on VEC model and the Johansen (1991) cointegration technique, we have studied the relationship between interest rates (short and long term) and macroeconomic variables for three European countries: Germany, Netherlands and France utilizing quarterly data for the sample period 1976-1999. We find that each of the three countries have placed more weight on moderate the pace of inflation relative to output stabilization. The empirical evidence suggested that the primary goal of money supply is inflation control in all three countries. Exchange rate determination in all countries was not important for the formulation of monetary policy The German interest rates were strongly significant for Netherlands and France. This implies that there is an interrelationship between movements in the French and Dutch rates with the German ones.
Subject:
Subject (LC):
Keywords:
Monetary policy, Interest rates, Monetary policy rules
Notes:
JEL classification: E52, E58
