Monetary policy reaction functions are estimated for the UK over three periods--1985-90, 1992-97 and 1997-2003--in order to disentangle two effects: the switch from an emphasis on exchange rate stabilization to inflation targeting, and the introduction of instrument-independence in 1997. The external factors considered include US as well as German interest rates, and this leads to the identification of "domestic" and "international" models of the reaction function. The results suggest that it...Expand abstract
- Oxford Bulletin of Economics and Statistics
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Monetary Frameworks and Institutional Constraints: UK Monetary Policy Reaction Functions, 1985-2003.
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