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A Simple Empirical Measure of Central Banks' Conservatism

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  • Grégory Levieuge
  • Yannick Lucotte
Abstract
In this article we suggest a simple empirical and model‐independent measure of Central Banks' Conservatism based on the Taylor curve. This new indicator can easily be extended in time and space, whatever the underlying monetary regime of the countries considered. We demonstrate that our measure evolves in accordance with the monetary experiences of 32 OECD member countries from 1980 and is largely equivalent to the model‐based measure provided by for the post‐1985 period. We finally present the relevance of such an indicator for further empirical analysis addressing the preferences of Central Banks.

Suggested Citation

  • Grégory Levieuge & Yannick Lucotte, 2014. "A Simple Empirical Measure of Central Banks' Conservatism," Southern Economic Journal, John Wiley & Sons, vol. 81(2), pages 409-434, October.
    • Handle: RePEc:wly:soecon:v:81:y:2014:i:2:p:409-434
    DOI: 10.4284/0038-4038-2012.113
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    Cited by:

    1. Levieuge, Grégory & Lucotte, Yannick & Pradines-Jobet, Florian, 2021. "The cost of banking crises: Does the policy framework matter?," Journal of International Money and Finance, Elsevier, vol. 110(C).
    2. Jean-Bernard Chatelain & Kirsten Ralf, 2017. "Can We Identify the Fed's Preferences?," Working Papers halshs-01549908, HAL.
    3. de Haan, J. & Eijffinger, Sylvester, 2016. "The Politics of Central Bank Independence," Discussion Paper 2016-047, Tilburg University, Center for Economic Research.
    4. Vasco J. Gabriel & Ioannis Lazopoulos & Diana Lima, 2023. "Institutional Arrangements and Inflation Bias: A Dynamic Heterogeneous Panel Approach," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 55(1), pages 43-76, February.

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    More about this item

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications

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