Template-Type: ReDIF-Paper 1.0
Author-Name: Zeno Rotondi
Author-X-Name-First: Zeno
Author-X-Name-Last: Rotondi
Author-Email: primo.zeno.rotondi@capitalia.it
Author-Name: Giacomo Vaciago
Author-X-Name-First: Giacomo
Author-X-Name-Last: Vaciago
Author-Email: giacomo.vaciago@unicatt.it
Author-Workplace-Name: DISCE, Università Cattolica
Author-Workplace-Name: DISCE, Università Cattolica
Title: Lessons from the ECB experience: Frankfurt still matters!
Abstract: This paper compares the European Central Bank’s conduct of monetary policy (1999-2005) with that of the Bundesbank (after the German Unification: 1990-1998) in order to test the hypothesis of an ECB with “Bundesbank’s preferences” put forward in the theoretical literature (Alesina and Grilli 1993, Fatum 2006). Econometric tests and simulations based on monetary policy reaction functions show that the continuation of the former Bundesbank regime is supported by the data. Given this empirical evidence we discuss the lessons for future Monetary Unions stemming from the ECB experience.
Length: nn pages 23
Creation-Date: 2007-03
Publication-Status: 
File-URL: http://www.unicatt.it/Istituti/EconomiaFinanza/Quaderni/ief0070.pdf
File-Format: Application/pdf
File-Function: First version, 2006
Number: ief0070
Classification-JEL: E52, E58
Keywords: EMU, Monetary Policy, Reaction Function, Taylor rule, ECB, Bundesbank
Handle: RePEc:ctc:serie3:ief0070