Work

Monetary Policy in a Monetary Union: What Role for Regional Information?

Year: 2008

Type: preprint

Abstract: Can the central bank of a monetary union, whose objectives are exclusively defined in terms of union-wide variables, improve its performance by reacting to regional variables rather than to union-wide variables only? Our answer is not clear-cut. We find the improvement to be large when we use a backward-looking model of the economy and negligible when we use a hybrid model. The main determinant of this finding seems to be the different degree of inertia (or its opposite, the forward-lookingness) characterizing the two models, rather than other model features. JEL Code: E52. 1.

Source: SSRN Electronic Journal

Authors: Paolo Angelini, Paolo Del Giovane, Stefano Siviero, Daniele Terlizzese

Institution: Bank of Italy

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2096925447

Cites: 36

Cited by: 195

Related to: 10