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Journal Articles Journal of Money, Credit and Banking Year : 2015

Do Central Bank forecasts influence private agents? Forecasting Performance vs. Signals

Abstract

Focusing on a set of central banks that publish inflation forecasts in real time, this paper aims to establish whether central bank inflation forecasts influence private inflation forecasts. The response is positive in the five countries studied: Sweden, the United Kingdom, Canada, Switzerland, and Japan. Three hypotheses may explain this central bank influence: central bank forecasts are more accurate than private ones, are based on different information sets, and/or convey signals about future policy decisions and policymakers’ preferences and objectives. We provide evidence that the source of these central banks’ influence is not linked to their forecasting performance.

Dates and versions

hal-03399242 , version 1 (23-10-2021)

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Paul Hubert. Do Central Bank forecasts influence private agents? Forecasting Performance vs. Signals. Journal of Money, Credit and Banking, 2015, 47 (4), pp.771-789 - 789. ⟨10.1111/jmcb.12227⟩. ⟨hal-03399242⟩

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