FIVE YEARS OF SINGLE EUROPEAN MONETARY POLICY IN PRACTICE: IS THE ECB RULE-BASED?

The article discusses the conduct of monetary policy of the ECB during its first five years. The authors estimate different versions of the forward-looking policy rule proposed by Clarida et al. (1998, 2000). The results suggest that the ECB applied indeed a Taylor-type rule to its monetary policy. The implied inflation targets that are extracted from the regressions are close to the range of the target that the ECB announced. (JEL "E52,""E58,""F4") Copyright 2006 Western Economic Association International.