Title: Output gaps and monetary policy in the EMU area
Authors: Gerlach, S. ×
Smets, Frank #
Issue Date: Apr-1999
Series Title: European Economic Review vol:43 issue:4-6 pages:801-812
Abstract: Several considerations suggest that the ECB may respond to EMU-wide output gaps in setting policy: estimated reaction functions indicate that central banks respond to output gaps; a Taylor rule in which the central bank responds to inflation and the gap accounts for recent movements in interest rates in the EMU-area; and optimal control exercises conducted in estimated econometric models suggest that reacting to the gap may be optimal, even if the central bank cares solely about inflation. In this paper, we obtain point estimates with associated confidence bands of the EMU-wide output gap using UC models.
ISSN: 0014-2921
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Non-KU Leuven Association publications
× corresponding author
# (joint) last author

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