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Fear of Forward Guidance

Author

Listed:
  • Alex Isakov

    (VTB Capital)

  • Petr Grishin

    (VTB Capital)

  • Oleg Gorlinsky

    (VTB)

Abstract

This article is a response to the review of Adrian et al. (2018) by Yudaeva (2018), which summarizes the case of the Bank of Russia against the publication of key rate forecasts, a communication strategy known as conventional forward guidance. We believe that the case in favour of publishing the Bank of Russia’s key rate forecast is at present not stated sufficiently coherently. Our note attempts to fill this gap. Extending the argument put forward by Adrian et al. (2018) we provide a comprehensive review of the working papers, staff notes and leadership comments related to interest rate expectations and monetary policy communication by four central banks that have had practical experience with the application of conventional forward guidance. We conclude with an evaluation of the validity of the commonly voiced concerns regarding its adoption in Russia, based on the reviewed literature.

Suggested Citation

  • Alex Isakov & Petr Grishin & Oleg Gorlinsky, 2018. "Fear of Forward Guidance," Russian Journal of Money and Finance, Bank of Russia, vol. 77(4), pages 84-106, December.
    • Handle: RePEc:bkr:journl:v:77:y:2018:i:4:p:84-106
    DOI: 10.31477/rjmf.201804.84
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    References listed on IDEAS

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    Cited by:

    1. Alina Evstigneeva & Mark Sidorovskiy, 2021. "Assessment of Clarity of Bank of Russia Monetary Policy Communication by Neural Network Approach," Russian Journal of Money and Finance, Bank of Russia, vol. 80(3), pages 3-33, September.
    2. Tatiana Evdokimova & Grigory Zhirnov & Inge Klaver, 2019. "The Impact of Inflation Anchor Strength and Monetary Policy Transparency on Inflation During the Period of Emerging Market Volatility in Summer 2018," Russian Journal of Money and Finance, Bank of Russia, vol. 78(3), pages 71-88, September.

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    More about this item

    Keywords

    inflation targeting; monetary policy; central bank communications;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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