ECB Projections as a Tool for Understanding Policy Decisions

Hubert, Philippe

doi:10.1002/for.2356

Cited by 21 publications

(19 citation statements)

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“…inflation projection and current HICP inflation) and then derive their weights by minimizing the sum of residuals (in absolute terms), it occurs that for both measures of short-term expectations only one of two collinear variables is needed, which confirms the results based on nested models. 18 Our results are consistent with Hubert (2015), who shows that ECB rate and ECB inflation projection shocks impact SPF forecasts.…”

Section: [Insert Table 4 Here]supporting

confidence: 82%

Anchoring of inflation expectations in the euro area: Recent evidence based on survey data

Łyziak

Paloviita

2017

European Journal of Political Economy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The selection and refereeing process for this paper was carried out by the Chairs of the Task Force. Papers were selected based on their quality and on the relevance of the research subject to the aim of the Task Force. The authors of the selected papers were invited to revise their paper to take into consideration feedback received during the preparatory work and the referee's and Editors' comments. Terms of use: Documents in EconStor mayThe paper is released to make the research of LIFT generally available, in preliminary form, to encourage comments and suggestions prior to final publication. The views expressed in the paper are the ones of the author(s) and do not necessarily reflect those of the ECB, the ESCB, or any of the ESCB National Central Banks.ECB Working JEL: D84, E52, E58 Keywords:Inflation expectations, anchoring, survey data, euro area, financial crisis. ECB Working Paper 1945, August 2016 2 Non-technical summaryThis paper examines the anchoring of survey-based measures of inflation expectations in the euro area. We consider inflation expectations of professional forecasters and consumers for 1999Q1-2015Q3. In the case of the professional forecasters, we use one-year ahead, two-years ahead and 4-5-years ahead inflation forecasts from the ECB Survey of Professional Forecasters (SPF), conducted every quarter. In the case of consumers, we use the European Commission Consumer survey, which provides a unique set of harmonised monthly data on 12-months ahead consumer inflation expectations across the EU economies. As the survey question is qualitative, we quantify consumer inflation expectations using the probability approach.We analyse anchoring of inflation expectations in the EMU period and pay special attention to possible changes in anchoring over the last few years, a period characterized by low inflation, increased economic uncertainty, zero lower bound (ZLB), and unconventional monetary policy measures. First, we examine the responsiveness of inflation expectations to actual inflation and the reaction of longer-term inflation expectations to shorter-term ones. Then, we analyse the anchoring of long-term inflation expectations to the ECB inflation target and extend this analysis to describe the behaviour of short-and medium-term inflation expectations. The novelty of our approach is in assessing the effectiveness of two main communication tools used by the ECB, the inflation target and the ECB inflation projections provided by the Eurosy...

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Section: [Insert Table 4 Here]supporting

confidence: 82%

Anchoring of inflation expectations in the euro area: Recent evidence based on survey data

Łyziak

Paloviita

2017

European Journal of Political Economy

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“…In a similar vein, the work of Anderson and Maule (2014) assesses the anchoring of short-term inflation expectations in the United Kingdom considering the Bank of England's inflation projections as one of its determinants. Likewise, Hubert (2015) showed that the projections of the European Central Bank play an important role in the formulation of short and medium-term expectations in the Eurozone.…”

Section: Empirical Analysis Of the Short Termmentioning

confidence: 99%

“…A second point we should consider is the effect of new inflation information on the formulation of economic agents' expectations. According to Hubert (2015), the effects of central bank inflation projections on private agents are stronger at the beginning of each year than at the end, when much more information is available on the actual behavior of inflation. Consequently, this document mainly considers the projections announced by the BCB at the beginning of each year.…”

Section: Fig 6 New Bcb Projectionmentioning

confidence: 99%

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The Time-Varying Degree of Inflation Expectation Anchoring in Bolivia

Barrenechea¹,

Gómez²,

Coria³

2018

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“…It is particularly interesting to compare this result with the effect of ECB inflation projections. Hubert () shows that the effect of the ECB rate on private forecasts depends on ECB projections.…”

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confidence: 99%

The Influence and Policy Signalling Role of FOMC Forecasts

Hubert

2015

Oxf Bull Econ Stat

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Federal Open Market Committee (FOMC) policymakers have published macroeconomic forecasts since 1979 and we examine the effects of FOMC inflation forecasts using a structural VAR model. First, we assess whether they influence private inflation expectations. Second, we investigate the underlying mechanism at work and whether they convey policy signals. We provide original evidence that FOMC inflation forecasts influence private ones. We also find that the influencing effect of FOMC forecasts does not come through current Fed rate changes, that FOMC forecasts affect private expectations in a different way than current policy decisions, and that FOMC forecasts are informative about future Fed rate movements.

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ECB Projections as a Tool for Understanding Policy Decisions

Cited by 21 publications

References 51 publications

Anchoring of inflation expectations in the euro area: Recent evidence based on survey data

Anchoring of inflation expectations in the euro area: Recent evidence based on survey data

The Time-Varying Degree of Inflation Expectation Anchoring in Bolivia

The Influence and Policy Signalling Role of FOMC Forecasts

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