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| Darius Kulikauskas |
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| ''Nonlinear Taylor rule for the European Central Bank'' |
| ( 2014, Vol. 34 No.3 ) |
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| In this paper I add to the evidence on possible nonlinearities in the conduct of ECB monetary policy. For this purpose a nonlinear Taylor rule (threshold regression) was estimated and compared to a linear benchmark model. The estimation was carried out with output gap data computed from quarterly GDP time series. The results show that a nonlinear Taylor rule fits the data better than a linear one. |
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| Keywords: Taylor rule, monetary policy, threshold, European Central Bank, ECB, nonlinear |
JEL: E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General
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| Manuscript Received : Aug 20 2014 | | Manuscript Accepted : Aug 20 2014 |
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