Template-Type: ReDIF-Article 1.0

Author-Name: Ruben Durko
Author-Workplace-Name: John von Neumann University
Author-Email: rubendurko@gmail.com
Author-Person:  

Title: How Major Central Banks Reacted to the Inflationary Wave of the Early 2020s - The Case of the ECB

Abstract: From 2021 onwards, inflationary pressures around the world have forced most
central banks to raise interest rates from a level that had long been around 0 per
cent. However, some central banks, including the European Central Bank (ECB),
have often been the subject of criticism for not paying enough attention to the
emerging inflationary spiral. The author examines whether there is evidence that
the ECB started to tighten monetary conditions later than it had done in the past.
The interest rate rule widely applied by the academic community and the results
of the pseudo-forecast based on this rule show that the ECB moved later than its
historical behaviour would suggest, i.e. it started tightening three quarters later
than indicated in the model; nevertheless, by the end of 2022, the actual and the
theoretical rates were in line thanks to the intensive rate hikes.

Classification-JEL: E31, E52, E43, E47
Keywords: inflation, monetary policy, euro area, interest rate rule
Pages: 31-57
Volume: 22
Issue: 4
Year: 2023
File-URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-22-4-st1-durko.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:22:y:2023:i:4:p:31-57