Macroeconomic uncertainty and performance in the European Union and implications for the objectives of monetary policy

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Show simple item record Bredin, Donal Fountas, Stilianos 2009-06-15T13:59:42Z 2009-06-15T13:59:42Z 2005, Centre for Financial Markets en 2005
dc.description.abstract We use a very general bivariate GARCH-M model and EU monthly data covering the 1962-2003 period to test for the impact of real (output growth) and nominal (inflation) macroeconomic uncertainty on inflation and output growth. Our evidence supports a number of important conclusions. First, in the majority of countries uncertainty regarding the output growth rate is related to the average growth rate and the effect in most countries is negative. Second, contrary to expectations,inflation uncertainty in most cases improves the output growth performance of an economy. Third, inflation and output uncertainty have a mixed effect on inflation. These results imply that macroeconomic uncertainty may even improve macroeconomic performance. The first two results also imply that the ECB should focus its monetary policy strategy on stabilising output growth rather than inflation. en
dc.format.extent 181865 bytes
dc.format.mimetype application/pdf
dc.language.iso en en
dc.publisher University College Dublin. School of Business. Centre for Financial Markets en
dc.relation.ispartofseries Centre for Financial Markets working paper series en
dc.relation.ispartofseries WP-06-03 en
dc.subject Inflation en
dc.subject Output growth en
dc.subject Macroeconomic uncertainty en
dc.subject Monetary policy en
dc.subject GARCH models en
dc.subject.lcsh Inflation (Finance)--Econometric models en
dc.subject.lcsh Economic development--Econometric models en
dc.subject.lcsh Macroeconomics en
dc.subject.lcsh Monetary policy--European Union countries en
dc.title Macroeconomic uncertainty and performance in the European Union and implications for the objectives of monetary policy en
dc.type Working Paper en
dc.internal.availability Full text available en
dc.internal.webversions en
dc.status Not peer reviewed en
dc.neeo.contributor Bredin|Donal|aut|
dc.neeo.contributor Fountas|Stilianos|aut|

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