Author

Contributions

  • West, Kenneth D. - Contributor
  • National Bureau of Economic Research. - Contributor

Publication

2004 - National Bureau of Economic Research, Cambridge, Mass, Massachusetts

Language

English

Word Count

5,500 words, Guess

Page Count

22 pages

Identifiers

Description

"We explore the link between an interest rate rule for monetary policy and the behavior of the real exchange rate. The interest rate rule, in conjunction with some standard assumptions, implies that the deviation of the real exchange rate from its steady state depends on the present value of a weighted sum of inflation and output gap differentials. The weights are functions of the parameters of the interest rate rule. An initial look at German data yields some support for the model"--National Bureau of Economic Research web site.

Description

"We explore the link between an interest rate rule for monetary policy and the behavior of the real exchange rate. The interest rate rule, in conjunction with some standard assumptions, implies that the deviation of the real exchange rate from its steady state depends on the present value of a weighted sum of inflation and output gap differentials. The weights are functions of the parameters of the interest rate rule. An initial look at German data yields some support for the model"--National Bureau of Economic Research web site.

Subjects

Links

Other Editions

  • Taylor rules and the Deutschmark-dollar real exchange rateNational Bureau of Economic Research2004

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