Monetary Policy and Foresighted Taylor Rules: Theory and Experience by the Example of the German Federal Bank (Geldpolitik Und Vorausschauende Taylor-Regeln: Theorie Und Empirie Am Beispiel Der Deutschen Bundesbank)
Wirtschaftswissenschaftliches Studium (WiSt), Vol. 32, No. 1, pp. 15-19, 2003
18 Pages Posted: 6 Jul 2005
This paper uses the empirical framework for estimating forward looking monetary policy rules developed in Clarida, Galí and Gertler (1998, 2000) to study monetary policy in Germany in the period 1991 to 1998. The estimation results show that the Bundesbank stabilized both inflation and the output gap in the 1990s. The money aggregate M3 influenced the behavior of the German central bank through its property as a leading indicator for future inflation.
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Keywords: Monetary policy, Taylor rule, Deutsche Bundesbank
JEL Classification: E58
Suggested Citation: Suggested Citation