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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research

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What does "below, but close to, two per cent" mean? Assessing the ECB's reaction function with real time data, International Journal of Central Banking 2 (June) (2021). Haavio, Markus; Jalasjoki, Pirkka; Kilponen, Juha; Paloviita, Maritta


Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Haavio, Markus; Jalasjoki, Pirkka; Kilponen, Juha; Paloviita, Maritta 
Number of authors 4 
Status Published
Year of publication 2021 
Date 01.06.2021 
Name of article What does "below, but close to, two per cent" mean? Assessing the ECB's reaction function with real time data 
Name of journal International Journal of Central Banking
Volume of issue 17 
Number of issue 2 (June) 
Pages 125-170 
Abstract Using unique real-time quarterly macroeconomic projections of the Eurosystem/ECB staff, we estimate competing specifications of the ECB's monetary policy reaction function. We consider specifications which include inflation and output growth projections, a past inflation gap, a time-varying natural real interest rate, and different inflation targets. Our first key finding is that the de facto inflation target of the ECB lies between 1.6 percent and 1.8 percent. Our second key finding is that the ECB reacts both to short-term macroeconomic projections and to past deviations of inflation from its de facto target.
Free text descriptor in Finnish inflaatio; tavoitteet; rahapolitiikka; euroalue; hinnat; EKP; reaktiofunktiot; hintavakaus; säännöt; Taylorin sääntö; uskottavuus; eurojärjestelmä 
Free text descriptor in English credibility; inflation target; monetary policy; realtime projections; Taylor rule 
JEL-codes E31, E52, E58 
ISSN / e-ISSN 1815-4654 
auki Internet addresses
Notes BoF DP 29/2017 
Open Access Open access -publication
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