Abstract The relevance of public support for monetary policy has largely been overlooked in the empirical central bank literature. We have constructed a new indicator for the support of the German Bundesbank and present descriptive and empirical evidence. We nd that major German interest groups were quite heterogeneous in judging a given policy stance. Empirically, we show that (a) public support can (at least partly) o set pressure from other organized groups and (b) accounting for popular support of the central bank allows to make more accurate forecasts of the short-term interest rate.
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Paper provided by University of Groningen, CCSO Centre for Economic Research in its series CCSO Working Papers with number
200108.