Three dimensions of central bank credibility and inferential expectations: The Euro zone

Abstract

We use the behavior of in ‡ation among Eurozone countries to provide information about the degree of credibility of the European Central Bank (ECB) since 2008. We de…ne credibility along three dimensions-o¢ cial target credibility, cohesion credibility and anchoring credibility-and show in a new econometric framework that the latter has deteriorated in recent history; that is, price setters are less likely to rely on the ECB target when forming in ‡ation expectations.

Do monetary policy transparency and central bank communication reduce interest rate disagreement?

“…Recent studies show that unconventional monetary policy actions have been associated with the reduction in disagreement about interest rate forecasts (Jitmaneeroj et al, 2019;Kool & Thornton, 2015). Finally, as the central bank aims to manage the private sector's expectations, the effectiveness of monetary policy depends on the credibility economic agents have in central bank's ability to achieve its objectives (e.g., Blinder, 2000;Cecchetti & Krause, 2002;de Haan et al, 2005;Dovern et al, 2012;Henckel, Menzies, Moffatt, & Zizzo, 2019). Central bank credibility is therefore crucial for the conduct of monetary policy and a stable macroeconomic environment (e.g., Bordo & Siklos, 2015;de Mendonça, 2007;Montes & Bastos, 2014).…”

Customer Purchase Intentions toward Islamic Banking Products in Pakistan: A Study of Religiosity-Based Marketing

“…Customers refer to the principles of the Sharia board when speaking to people in their social networks, which creates awareness of these principles and generates positive word of mouth (Auf, Salleh, & Yusoff, 2016). Religiosity-based marketing strategies help to safeguard customers' investment in Islamic products, and providing guarantees makes banks more credible because a credible bank promises to build and maintain its transparency, reputation and independence (Henckel, Menzies, Moffatt, & Zizzo, 2019;Walsh, 2009).…”

“…Similarly, credibility is becoming universally important for banks, academics and practitioners in attracting and retaining customers. In the banking system, credibility describes the compliance of well-articulated and transparent policies and principles, and a strong belief that a change in policy is actually implemented (Henckel et al, 2019).…”