A Simple Empirical Measure of Central Banks' Conservatism

In this article we suggest a simple empirical and model-independent measure of Central Banks' Conservatism based on the Taylor curve. This new indicator can easily be extended in time and space, whatever the underlying monetary regime of the countries considered. We demonstrate that our measure evolves in accordance with the monetary experiences of 32 OECD member countries from 1980 and is largely equivalent to the model-based measure provided by Krause and Mendez (2005) for the post-1985 period. We finally present the relevance of such an indicator for further empirical analysis addressing the preferences of Central Banks.