Publication

This paper examines whether the European Central Bank (ECB) has changed its behavior after it announced the revision of its monetary policy strategy in May 2003. The authors therefore estimate several Taylor-type reaction functions and conduct a structural change analysis. They find that the ECB has been following a stabilizing rule and that there is no clear-cut evidence for a break after the revision. They note, however, that some signals of instability show up, particularly in June 2003.