We estimate the central bank policy preferences for the European Monetary Union and for the UK. In doing so, we extend the theoretical framework suggested by Cecchetti et al. (2002) by assuming that policy preferences change across different regimes either due to the different phases of the business cycle, or due to changes in propagation mechanism, or due to volatility shifts of the underlying structural shocks. Our empirical results suggest that the weight that policy makers put on inflation is typically profound. Furthermore, it appears that volatility shifts of the economic disturbances is the main factor, which generates variation in policy preferences.This is the author accepted manuscript. The final version is available from Wiley via https://doi.org/10.1111/manc.1212
