Monetary Policy Is Not Always Systematic and Data-Driven: Evidence from the Yield Curve

Author/Editor:

Ales Bulir ; Jan Vlcek

Publication Date:

January 17, 2020

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

Does monetary policy react systematically to macroeconomic innovations? In a sample of 16 countries – operating under various monetary regimes – we find that monetary policy decisions, as expressed in yield curve movements, do react to macroeconomic innovations and these reactions reflect the monetary policy regime. While we find evidence of the primacy of the price stability objective in the inflation targeting countries, links to inflation and the output gap are generally weaker and less systematic in money-targeting and multiple-objective countries.

Series:

Working Paper No. 20/4

Subject:

English

Publication Date:

January 17, 2020

ISBN/ISSN:

9781513522012/1018-5941

Stock No:

WPIEA2020004

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

36

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