The European Central Bank: Decision Rules and Macroeconomic Performance
CEPR Discussion Paper Series Number 2067
Posted: 18 Jun 1999
Date Written: February 1999
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: Suggested Citation