Rate this paper
  • Currently rating
  • 1
  • 2
  • 3
  • 4
  • 5
3.67 / 3
Paper Topic:

Monetary policy of the European Central Bank

Analysis of European Central Bank 's Monetary Policy

A Dissertation

Presented to

In Partial Fulfilment

of the Requirements for the Degree

of

Submitted By

___________

ABSTRACT

This dissertation analyses monetary policy of the European Central Bank (ECB ) and investigates the effect of monetary policy rule of the European Central Bank on the economic performance of European monetary union (EMU . The stated goal of the ECB price stability given by annual inflation of at or below 2 is an indicator that the bank is following an inflation targeting

policy . Given this goal , this study proposes to evaluate the efficiency of the ECB in maintaining an unbiased monetary policy with a target of price stability , and to measure the reaction of the member states ' economies to financial shocks . To do so , the dissertation will assess the efficiency of the monetary policy instrument used by the European Central Bank and evaluate its national transmission . The emphasis is placed on the analysis of the monetary policy in the Euro area applying Taylor rule . This work contributes to the literature in that it applies the results of other works to the particular and unique circumstances of the euro area . Literature exists on the Taylor Rule for some individual European countries . However , no studies located that have used the Taylor Rule to empirically test these implications for the efficiency of the European Central Bank using all euro area countries

ACKNOWLEDGEMENTS (Sample

First of all , I would like to thank my parents and my ______ for their love and continuous and invaluable support during my studies and process of writing the dissertation , without my family it would not have been possible

I wish to acknowledge and express my appreciation to my committee members who have provided guidance and assistance in the preparation of this study . I especially appreciate my professor and supervisor _______ for his full support throughout this study

I am very positive that no other person could have been a better chair for me than him . He has worked closely with me to coordinate and produce this study . I would also thank my parents and my friends who have been very encouraging

TABLE OF CONTENTS

Abstract .ii

Acknowledgements .iv

Table of Contents .v

List of Figures .viii

List of Tables .viii

CHAPTER ONE - INTRODUCTION .2

CHAPTER TWO - LITERATURE REVIEW .5

The Economic and Monetary Union and the European Central Bank : An Overview .5

Costs and Benefits of the Euro .6

Monetary Policy Strategy of the ECB Inflation Targeting .11

Monetary Policy Rules .14

2 .4 .1 Monetary Policy Targeting .20

2 .4 .2 Inflation Targeting .22

Monetary Policy Transmission Mechanism .23

CHAPTER THREE - ANALYTICAL FRAMEWORK , MODEL AND DATA .27

3 .1 ECB Policy .27

3 .2 The Model .27

3 .3 The Data .29

3 .3 .1 On Stationarity of the Variables .31

3 .3 .2 Lag Selection 33

CHAPTER FOUR - RESULTS AND EMPIRICAL ANALYSIS .36

4 .1 Estimation of the Taylor Rule for the National Economies .36

4 .1 .1 Estimates .36

4 .2...

Not the Essay You're looking for? Get a custom essay (only for $12.99)