Working Paper: NBER ID: w7598
Authors: Lars E.O. Svensson
Abstract: This paper is a brief evaluation of the Eurosystem's monetary-policy regime after its first year, in particular of the extent to which it is similar to inflation targeting as practiced by an increasing number of central banks. I examine the Eurosystem's goals, framework for monetary-policy decisions and communication with outsiders. Criteria for evaluation are whether the goals are unambiguous and appropriate; whether the decision framework is efficient in collecting and processing information and reaching decisions that are appropriate relative to the goals; and whether the communication is effective in motivating decisions, simplifying external evaluation and thereby improving transparency and accountability. I also consider whether the actual instrument setting has been appropriate, given the information available at the times of decision.
Keywords: No keywords provided
JEL Codes: E42; E52; E58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| eurosystem's goals (E52) | monetary policy framework (E60) |
| monetary policy framework (E60) | communication strategies (L96) |
| eurosystem's goals (E52) | communication strategies (L96) |
| communication strategies (L96) | external evaluations of policy decisions (D78) |
| goals of price stability (E31) | decision-making framework (D70) |
| decision-making framework (D70) | efficiency in collecting and processing information (D83) |