Interest Rates, ECB Communication and Inflation Expectations
نویسنده
چکیده
Guiding and anchoring inflation expectations of the public are key tasks of modern central banks. In this paper we investigate how the European Central Bank (ECB) influences inflation expectations of professional forecasters. We argue that it is a good sign that interest rate changes as such are not significant in explaining inflation expectations: The ECB has been able to prepare professional forecasters inflation expectations well in advance such that they only marginally have to adjust their forecasts. Consequently, only surprise interest rate movements have an impact. The empirical results confirm this hypothesis.
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