OF ST . ANDREWS External Influences and Institutional Constraints on UK Monetary Policy , 1985 - 2000
نویسندگان
چکیده
We examine the role and nature of external influences (US as well as German) and changing institutional constraints upon UK monetary policy by estimating Taylor-type reaction functions for three subperiods: 1985-90 (pre-ERM), 1992-97 (post-ERM) and 1997-2000 (MPC). We identify and contrast ‘domestic’ and ‘international’ models of the reaction function, and show that while the international model dominates for the first subperiod, a joint model dominates for the post-ERM, and a domestic model in which foreign interest rates function only as instruments dominates for the MPC period. We use these models to comment on the short ERM period, when the authorities reduced interest rates further and faster than they would have done on the basis of the pre-ERM rule, but less than on the post-ERM or MPC (or standard Taylor) rules. We interpret our findings as showing that it is the institutional changes (towards central bank independence) rather than changes in the external regime which have been decisive in the development of UK monetary policy in this period. JEL classification: E52, E58, F41
منابع مشابه
Nber Working Paper Series Nominal Stability and Financial Globalization
Over the one and a half decades prior to the global financial crisis, advanced economies experienced a large growth in gross external portfolio positions. This phenomenon has been described as Financial Globalization. Over roughly the same time frame, most of these countries also saw a substantial fall in the level and variability of inflation. Many economists have conjectured that financial gl...
متن کاملCompeting Logics and Healthcare; Comment on “(Re) Making the Procrustean Bed? Standardization and Customization as Competing Logics in Healthcare”
This paper offers a short commentary on the editorial by Mannion and Exworthy. The paper highlights the positive insights offered by their analysis into the tensions between the competing institutional logics of standardization and customization in healthcare, in part manifested in the conflict between managers and professionals, and endorses the plea of the authors for further research in this...
متن کاملWhistleblowing in the Wind Towards a Socially Situated Research Agenda: A Response to Recent Commentaries
متن کامل
A Decade of Dissent: Explaining the Dissent Voting Behavior of Bank of England MPC Members
We examine the dissent voting record of the Bank of England Monetary Policy Committee (MPC). Contrary to findings in the FOMC literature (for example Havrilesky and Schweitzer, 1990; Chappell, Havrilesky, and McGregor, 1993), the effects of members’ career backgrounds and the political channel of appointment on voting behavior are negligible, reflecting the distinct institutional constraints an...
متن کاملOptimal Cyclical Behavior of Monetary Policy of Iran: Using a DSGE Model
The countercyclical monetary policy is a policy that economists recommend to adopt in order to slow down the economic fluctuations. The aim of this study is to address the question that, in the presence of fiscal dominance and considering institutional quality (IQL), what the optimal monetary policy should be during the business cycles? To find the appropriate answer, first, in the framework of...
متن کامل