Herding Behaviour of Central Banks: Following the Fed and ECB

  • Jakub Bureš
Keywords: Interest rates, Taylor rule, Central banks, Currency wa

Abstract

I apply interest rate rules, especially the Taylor rule, to identify basic determinants of the central banks' decision-making process. The results confirmed herding behaviour related to the central bank financial assets and its economic power in the US and Eurozone. The conclusions are discussed in relation to the exchange rate movements and capital flows. The empirical strategy reflects different lag structure and employs autoregressive distributed lag models.

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Published
2017-11-30
Section
Articles