caa a22 4500 467896089 CHVBK 20180406152804.0 cr unu---uuuuu 170328e20060901xx s 000 0 eng 10.1007/s00181-005-0040-7 doi (NATIONALLICENCE)springer-10.1007/s00181-005-0040-7 Comparing monetary policy reaction functions: ECB versus Bundesbank [Elektronische Daten] [Bernd Hayo, Boris Hofmann] This paper compares the European Central Bank's (ECB) conduct of monetary policy with that of the Bundesbank. Estimated monetary policy reaction functions show that the ECB reacts similarly to expected inflation but significantly stronger to the output gap than the Bundesbank did. Theoretical considerations suggest that this stronger response to the output gap may rather be due to a higher interest rate sensitivity of the German output gap than to a higher weight given to output stabilisation in the objective function of the ECB. Counterfactual simulations based on the estimated interest rate reaction functions reveal that German interest rates would not have been lower under a hypothetical Bundesbank regime after 1999. However, this conclusion crucially depends on the assumption of an unchanged long-run real interest rate for the EMU period and is reversed when the Bundesbank reaction function is adjusted for the lower long-run real interest rate estimated for the ECB regime. Springer-Verlag, 2006 Taylor rule nationallicence Monetary policy nationallicence ECB nationallicence Bundesbank nationallicence Hayo Bernd Faculty of Business Administration and Economics (FB 02), Philipps-University Marburg, Universitaetsstr. 24, 35037, Marburg, Germany aut Hofmann Boris Zentrum für Europäische Integrationsforschung, University of Bonn, Walter-Flex-Str. 3, 53113, Bonn, Germany aut Empirical Economics Physica-Verlag 31/3(2006-09-01), 645-662 0377-7332 31:3<645 2006 31 181 https://doi.org/10.1007/s00181-005-0040-7 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.1007/s00181-005-0040-7 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Hayo Bernd Faculty of Business Administration and Economics (FB 02), Philipps-University Marburg, Universitaetsstr. 24, 35037, Marburg, Germany aut NATIONALLICENCE 700 1- Hofmann Boris Zentrum für Europäische Integrationsforschung, University of Bonn, Walter-Flex-Str. 3, 53113, Bonn, Germany aut NATIONALLICENCE 773 0- Empirical Economics Physica-Verlag 31/3(2006-09-01), 645-662 0377-7332 31:3<645 2006 31 181 Metadata rights reserved Springer special CC-BY-NC licence nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-springer