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Uncertainty and UK Monetary Policy

Martin, C. & Milas, C. (2004). Uncertainty and UK Monetary Policy (04/05). London, UK: Department of Economics, City University London.


This paper provides empirical evidence on the response of monetary policymakers to uncertainty. Using data for the UK since the introduction of inflation targets in October 1992, we find evidence that the impact of inflation on interest rates is lower when inflation is more uncertain and is larger when the output gap is more uncertain. These findings are consistent with the predictions of the theoretical literature.

Publication Type: Monograph (Discussion Paper)
Additional Information: © 2004 the authors
Publisher Keywords: monetary policy, uncertainty
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HJ Public Finance
Departments: School of Policy & Global Affairs > Economics > Discussion Paper Series
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