Reserve Board has to report to the Congress every six months about the envisaged monetary and credit developments. The Fed is, however, not required to meet these targets and failure to do so does not impose [...] (monetary) policymakers’ incentive to deviate ex post from ex ante announcements and to create surprise inflation to modify the real value of nominal contracts, for example to achieve short-term employment [...] principal’s interest. Walsh (1995a) proposed to tie the central banker’s personal compensation to inflation performance in order to increase the latter’s incentives to deliver price stability.
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coefficients of the lagged day-to-day rate sum to +0.86. This means that the Bundesbank prefered steady and smooth operating procedures to volatile money market rates. This corresponds to the medium-term orientation [...] shocks have no real effects at all.
standard In trying to identify asymmetric effects it is necessary to specify a central bank reaction function to assess the stance of monetary policy. Many of the above [...] presents the empirical analysis. To test for asymmetric reactions I use different regression approaches. The task is to first identify the stance of monetary policy and then to test for asymmetries. It is analyzed
national central banks are, by function, subordinated to the ECB "to allow the Eurosystem to
operate efficiently as a single entity with a view to achieving the objectives of the Treaty. (...)
As [...] Council of the ECB on the other hand meets every 2 weeks. In extraordinary cases, the Council
can meet at short notice, i.e. also between the official meetings, to decide with the aid of phone and/or video [...] has delegated to the Chairman the right to change interest rates between meetings
without consulting the Committee. But, except in very highly unusual circumstances the Chairman is likely to
consult the
aggregates. The data referred to western Germany up to the end of the second quarter of 1990 and to Germany as a whole from the third quarter of 1990. This means that it was unnecessary to model the different jumps [...] thing to do here is not to select the monetary components beforehand but, instead, to examine which financial assets can provide monetary services. For reasons of comparability we restricted them to the [...] advance. Its aim in doing so is to achieve its primary objective of fighting inflation as efficiently and effectively as possible.� It was the first central bank to switch to a monetary policy strategy of