Sobre el papel del saldo presupuestario en las decisiones del Banco Central Europeo

this study inquires into whether the budgetary balance of the set of countries constituting the european monetary union has influenced the european central bank's (ecb's) determination of short term interest rates. the empirical analysis is performed using the generalized method of moments to estimate a monetary policy reaction function that includes the aforementioned fiscal variable. it was found that for the period 1999:1 to 2007:4, the budget balance was a significant variable in the ecb's reaction function.