Monetary Policy Is Not Always Systematic and Data-Driven: Evidence from the Yield Curve
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Summary:
Does monetary policy react systematically to macroeconomic innovations? In a sample of 16 countries – operating under various monetary regimes – we find that monetary policy decisions, as expressed in yield curve movements, do react to macroeconomic innovations and these reactions reflect the monetary policy regime. While we find evidence of the primacy of the price stability objective in the inflation targeting countries, links to inflation and the output gap are generally weaker and less systematic in money-targeting and multiple-objective countries.
Series:
Working Paper No. 2020/004
Subject:
Central bank policy rate Exchange rates Financial services Foreign exchange Inflation Inflation targeting Monetary policy Prices Yield curve
English
Publication Date:
January 17, 2020
ISBN/ISSN:
9781513522012/1018-5941
Stock No:
WPIEA2020004
Pages:
36
Please address any questions about this title to publications@imf.org