DP8160 What Drives the European Central Bank's Interest-Rate Changes?

Author(s): Morten Aastrup, Henrik Jensen
Publication Date: December 2010
Keyword(s): ECB monetary policy, Taylor principle, Taylor rules
JEL(s): E43, E58
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=8160

We show that the ECB's interest rate changes during 1999-2010 have been mainly driven by changes in economic activity in the Euro area. Changes in actual or expected future HICP inflation play a minor, if any, role.