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EUROPEAN CENTRAL BANK POLICY‐MAKING AND THE FINANCIAL CRISIS
Author(s) -
Gorter Janko,
Stolwijk Fauve,
Jacobs Jan,
Haan Jakob
Publication year - 2014
Publication title -
international journal of finance and economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 39
eISSN - 1099-1158
pISSN - 1076-9307
DOI - 10.1002/ijfe.1452
Subject(s) - economics , inflation (cosmology) , financial crisis , monetary policy , price of stability , point (geometry) , macroeconomics , taylor rule , financial stability , monetary economics , central bank , financial system , physics , geometry , mathematics , theoretical physics
We estimated Taylor rule models for the euro area using Consensus Economics forecasts of inflation and output growth for the period 1998.6–2010.8. We first examined whether the recent financial crisis has affected European Central Bank (ECB) policies. Our results indicate that the ECB puts stronger emphasis on maintaining price stability than the earlier point estimates suggested. Next, we analysed whether economic developments in individual euro area countries affect ECB decisions. Despite the diverging economic developments in the countries in the euro area, notably during the recent financial crisis, we did not find support for the view that policy decisions have been influenced by regional developments. Copyright © 2012 John Wiley & Sons, Ltd.