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Monetary Policy Preferences of the EMU and the UK
Author(s) -
Arestis Philip,
Karoglou Michail,
Mouratidis Kostas
Publication year - 2016
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/manc.12121
Subject(s) - economics , monetary policy , volatility (finance) , inflation (cosmology) , monetary economics , macroeconomics , econometrics , physics , theoretical physics
We estimate the central bank policy preferences for the E uropean M onetary Union and for the UK . In doing so, we extend the theoretical framework suggested by C ecchetti et al . ( T he M anchester S chool , Vol. 70 (2002), pp. 596–618), by assuming that policy preferences change across different regimes. Our empirical results suggest that the weight that policy makers put on inflation is typically profound. Furthermore, it appears that volatility shifts of the economic disturbances are the main factor, which generates variation in policy preferences.