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- Title
Qualitative and quantitative central bank communication and inflation expectations.
- Authors
Hubert, Paul
- Abstract
We aim to investigate the simultaneous and interacted effects of central bank qualitative and quantitative communication on private inflation expectations, measured with survey and market-based measures. The effects of ECB inflation projections and Governing Council members' speeches are identified through an instrumental-variables estimation using a principal component analysis to generate relevant instruments. We find that ECB projections have a positive effect on current-year forecasts, and that ECB projections and speeches are substitutes at longer horizons. Moreover, ECB speeches and the ECB rate reinforce the effect of ECB projections when they are consistent, and convey the same signal about inflationary pressures.
- Subjects
EUROPEAN Union countries; COMMUNICATION; MATHEMATICAL models; INFLATION forecasting; CENTRAL banking industry; PRINCIPAL components analysis; MONETARY policy; SPEECHES, addresses, etc.; EUROPEAN Central Bank
- Publication
B.E. Journal of Macroeconomics, 2017, Vol 17, Issue 1, p-1
- ISSN
2194-6116
- Publication type
Article
- DOI
10.1515/bejm-2016-0024