ECB Policy Making and the Financial Crisis

20 Pages Posted: 27 Oct 2011 Last revised: 28 Oct 2011

See all articles by Janko Gorter

Janko Gorter

Dutch Central Bank (DNB)

Fauve Stolwijk

affiliation not provided to SSRN

Jan P. A. M. Jacobs

University of Groningen - Faculty of Economics and Business

Jakob de Haan

University of Groningen - Faculty of Economics and Business; De Nederlandsche Bank; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: December 1, 2010

Abstract

We estimate 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 examine whether the recent financial crisis has affected ECB policies. Our results indicate that the ECB puts stronger emphasis on maintaining price stability than earlier point estimates suggested. Next, we analyse 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 do not find support for the view that policy decisions have been influenced by regional developments.

Keywords: Taylor rule, ECB, regional influence, real time data

JEL Classification: C22, E52

Suggested Citation

Gorter, Janko and Stolwijk, Fauve and Jacobs, Jan P.A.M. and de Haan, Jakob, ECB Policy Making and the Financial Crisis (December 1, 2010). De Nederlandsche Bank Working Paper No. 272. Available at SSRN: https://ssrn.com/abstract=1950169 or http://dx.doi.org/10.2139/ssrn.1950169

Janko Gorter (Contact Author)

Dutch Central Bank (DNB) ( email )

P.O. Box 98
Amsterdam, 1000 AB
Netherlands
+31 20 524 34 97 (Phone)

Fauve Stolwijk

affiliation not provided to SSRN

Jan P.A.M. Jacobs

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

Jakob de Haan

University of Groningen - Faculty of Economics and Business ( email )

PO Box 800
Groningen, 9700 AV
Netherlands
+31 0 50 3633706 (Fax)

De Nederlandsche Bank ( email )

P.O. Box 98
Amsterdam, 1000 AB
Netherlands

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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