| Author: | Cobham, D. |
| Title: | Why does the monetary policy committee smooth interest rates? |
| Journal: | Oxford Economic Papers
2003 : JUL, VOL. 55:3, p. 467-493 |
| Index terms: | Monetary policy Interest rates United Kingdom |
| Language: | eng |
| Abstract: | The author shows that policy has been smoothest and comparable to that in other countries in the period of inflation targeting with Bank of England control of interest rates since 1997. They use the remarably detailed evidence available from the minutes of the Monetary Policy Committee to evaluate the relevance of the various explanations of smoothing for the UK in this period. The paper concludes that the explanation of interest rate smoothing should be sought primarily in the serial correlation of shocks, together with some minor and short-term influences from uncertainty, while the other explanations turn out to be not relevant. |
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