The British opt-out from the European Monetary Union: empirical evidence from monetary policy rules

We analyze the current state of the monetary integration in Europe focusing on the UK position regarding the European Monetary
Union. The interest rates decisions of the European Central Bank
and the Bank of England are compared through different specifications of the Taylor Rule.
The comparison of the monetary conducts provides a useful feedback when looking for the differences claimed
by the British government as motivating the UK refusal to join the European Monetary Union.
Testing for a forward looking behavior and possible asymmetries in the policy responses, we show evidence
supporting the opt-out by the UK monetary authorities.