The European Central Bank: Decision Rules and Macroeconomic Performance

CEPR Discussion Paper Series Number 2067

Posted: 18 Jun 1999

See all articles by Paul De Grauwe

Paul De Grauwe

London School of Economics & Political Science (LSE); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Centre for Economic Policy Research (CEPR)

Hans Dewachter

Catholic University of Leuven (KUL) - Department of Economics; Erasmus Research Institute of Management (ERIM)

Yunus Aksoy

Birkbeck University of London

Date Written: February 1999

Abstract

In this paper we analyse the effects of different decision rules in the ECB on monetary stability. We consider a model where asymmetric shocks and divergent propagation of shocks on output and inflation are potential causes of tensions within the ECB concerning the conduct of monetary (interest rate) policy. Given divergence of desired interest rates (due to the asymmetries) we analyse the effect of different voting procedures within the Governing Council of the ECB. Welfare implications are discussed.

JEL Classification: F33. F36. F42

Suggested Citation

De Grauwe, Paul and Dewachter, Hans and Aksoy, Yunus, The European Central Bank: Decision Rules and Macroeconomic Performance (February 1999). CEPR Discussion Paper Series Number 2067, Available at SSRN: https://ssrn.com/abstract=154683

Paul De Grauwe (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Hans Dewachter

Catholic University of Leuven (KUL) - Department of Economics ( email )

Center for Economic Studies
Naamsestraat 69
Leuven, B-3000
Belgium
+0032 16 326859 (Phone)
+0032 16 326796 (Fax)

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Yunus Aksoy

Birkbeck University of London ( email )

Malet Street
Room: 726
London WC1E 7HX
United Kingdom
+44 (0) 20 7631 6407 (Phone)
+44 (0) 20 7631 6416 (Fax)

HOME PAGE: http://sites.google.com/site/yaksoy2002/home

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