Lessons from the ECB Experience: Frankfurt Still Matters!

24 Pages Posted: 11 Jan 2008

See all articles by Zeno Rotondi

Zeno Rotondi

UNICREDIT; LUISS Guido Carli University

Giacomo Vaciago

Catholic University of the Sacred Heart of Milan - Institute of Economy and Finance

Multiple version iconThere are 2 versions of this paper

Abstract

This paper compares the European Central Bank's (ECB) conduct of monetary policy (1999-2005) with that of the Bundesbank (after the German Unification; 1990-1998) in order to test the hypothesis of an ECB with 'Bundesbank's preferences' put forward in the theoretical literature (Alesina and Grilli, 1993; Fatum, 2006). Econometric tests and simulations based on monetary policy reaction functions show that the continuation of the former Bundesbank regime is supported by the data. Given this empirical evidence we discuss the lessons for future Monetary Unions stemming from the ECB experience.

Suggested Citation

Rotondi, Zeno and Vaciago, Giacomo, Lessons from the ECB Experience: Frankfurt Still Matters!. Economic Notes, Vol. 36, No. 2, pp. 147-170, July 2007, Available at SSRN: https://ssrn.com/abstract=1082616 or http://dx.doi.org/10.1111/j.1468-0300.2007.00182.x

Zeno Rotondi (Contact Author)

UNICREDIT ( email )

VIA SPECCHI 16
ROME, 00186
Italy

HOME PAGE: http://docenti.luiss.it/rotondi

LUISS Guido Carli University ( email )

Via O. Tommasini 1
Rome, Roma 00100
Italy

Giacomo Vaciago

Catholic University of the Sacred Heart of Milan - Institute of Economy and Finance ( email )

Via Necchi 5
20123 Milano
Italy

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
8
Abstract Views
406
PlumX Metrics