Does central bank communication really lead to better forecasts of policy decisions? : new evidence based on a Taylor rule model for the ECB

Arbeitspapier

Nowadays, it is widely believed that greater disclosure and clarity over policy may lead to greater predictability of central bank actions. We examine whether communication by the European Central Bank (ECB) adds information compared to the information provided by a Taylor rule model in which real time expected inflation and output are used. We use five indicators of ECB communication that are all based on the ECB President's introductory statement at the press conference following an ECB policy meeting. Our results suggest that even though the indicators are sometimes quite different from one another, they add information that helps predict the next policy decision of the ECB. Furthermore, also when the interbank rate is included in our Taylor rule model, the ECB communication indicators remain significant.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 2760

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy ; Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
• Subject: ECB ; central bank ; communication ; Taylor rule ; Geldpolitik ; Zentralbank ; Staatliche Information ; Kommunikation ; Taylor-Regel ; Inflationserwartung ; EU-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Sturm, Jan-Egbert ; de Haan, Jakob
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/30571
• Last update: 10.03.2025, 11:44 AM CET