Can central bank communication help to stabilise inflation expectations?

Arbeitspapier

This paper examines whether central bank communication stabilises euro area inflation expectations through the information and news channel. A novelty of the study is its use of data from Google Analytics on ECB website traffic as proxy for visitors' attention to its communication. We conduct several econometric tests with daily data to measure the impact of ECB communication on the information demand of the public and ultimately on inflation expectations. Overall, this study shows that website attention, as captured by search volumes of visitors, influences euro area inflation expectations. We find that increased website attention contributes to narrowing the gap between market-based forecasts and (the mean of) longer-term professional inflation expectations. Our findings add to the theoretical evidence on the existence of an information and news channel.

Object Details

• ISBN: 978-92-899-4547-9
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 2547

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: General ; Information, Knowledge, and Uncertainty: General ; Monetary Policy ; Central Banks and Their Policies ; Information and Market Efficiency; Event Studies; Insider Trading
• Subject: website attention ; high-frequency identification ; forward guidance ; information demand ; information and news channel

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jung, Alexander ; Kühl, Patrick
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2021

Further information

• DOI: doi:10.2866/276208
• Handle: http://hdl.handle.net/10419/234101
• Last update: 10.03.2025, 11:45 AM CET