Announcements of Interest Rate Forecasts: Do Policymakers Stick to Them?

Arbeitspapier

If central banks value the ex-post accuracy of their forecasts, previously announced interest rate paths might affect the current policy rate. We explore whether this "forecast adherence" has influenced the monetary policies of the Reserve Bank of New Zealand and the Norges Bank, the two central banks with the longest history of publishing interest rate paths. We derive and estimate a policy rule for a central bank that is reluctant to deviate from its forecasts. The rule can nest a variety of interest rate rules. We find that policymakers appear to be constrained by their most recently announced forecasts.

Object Details

• ISBN: 978-82-7553-745-2
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2013/11

Classification and Topics

• Classification: Wirtschaft ; Interest Rates: Determination, Term Structure, and Effects ; Monetary Policy ; Central Banks and Their Policies
• Subject: Taylor rule ; interest rates ; forecasts ; adherence

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mirkov, Nikola ; Natvik, Gisle James
• Event: Veröffentlichung
• (who): Norges Bank
• (where): Oslo
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/210034
• Last update: 10.03.2025, 11:42 AM CET