DP2271 The Taylor Rule and Interest Rates in the EMU Area
| Author(s): | Stefan Gerlach, Gert Schnabel |
| Publication Date: | October 1999 |
| Keyword(s): | ECB, Taylor Rule |
| JEL(s): | E5 |
| Programme Areas: | International Macroeconomics |
| Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=2271 |
We demonstrate that average interest rates in the EMU countries in 1990-98, with the exception of the period of exchange market turmoil in 1992-93, moved very closely in relation to average output gaps and inflation as suggested by the Taylor rule.