Taylor Equations for Various Countries1
|Germany2||1.31 (0.09)||0.25 (0.04)|
|Japan2||2.04 (0.19)||0.08 (0.03)|
|United States2||1.79 (0.18)||0.07 (0.06)|
|post 82: 10||1.83 (0.45)||0.56(0.16)|
|Chile3||1.24 (0.18)||0.36 (0.32)|
|including CA deficit deviation from 4% target4||1.68 (0.29)||0.61 (0.24)|
|Chile5||1.60 (0.12)||-0.03 (0.19)|
|Peru6 (Includes the deviation of the real exchange rate from trend.)||-0.0022 (0.0008)||-0.0007 (0.0001)||-0.1106 (-0.048)|
All these results derive from GMM (that is instrumented) regressions of the sort described by equation (1) in the text. Standard errors are in parentheses. The developed country results are from Clarida, Galí and Gertler (1997), Chile is from Corbo (2000) and Restrepo (1998), and Peru is from Morón and Castro (2000).
Monthly data from 1979 through 1994.
From Corbo (2000). Quarterly data from 1990:1 through 1999:4. The dependent variable in this regression is the real interest rate; for purposes of comparison we have added 1 to the reported coefficient of 0.24.
From Corbo (2000). In the past, Chile used to have a declared objective of maintaining a current account deficit below 4% of GDP. The observed sign implies that an increase in the deficit led to a counter-cyclical increase in the real interest rate.
From Restrepo (1998).
From Morón and Castro (2000), estimated with the change in base money as the dependent variable from Jan 1992 to December 1999. The coefficients are not comparable because of the different dependent variable. The signs are as expected, in that low inflation, low output, and a depreciated exchange rate imply higher subsequent base money growth.