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Public Opinion on Central Banks when Economic Policy is Uncertain

Author

Listed:
  • Klodiana Istrefi
  • Anamaria Piloiu

Abstract

This paper investigates whether uncertainty about economic policy plays a role in shaping the credibility and reputation of the central bank in the eyes of the general public. In particular, we look at the effect of policy uncertainty for the dynamics of citizens? opinion, being trust, satisfaction or confidence, in the European Central Bank, the Bank of England and the Bank of Japan. Estimating Bayesian VARs for the period 1999-2014, we find that shocks to economic policy uncertainty induce economic contractions and relatively sharp deterioration in trust or satisfaction measures, which in general take longer than economic growth to re-build.

Suggested Citation

  • Klodiana Istrefi & Anamaria Piloiu, 2020. "Public Opinion on Central Banks when Economic Policy is Uncertain," Revue d'économie politique, Dalloz, vol. 130(2), pages 283-306.
    • Handle: RePEc:cai:repdal:redp_302_0283
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    Cited by:

    1. Alan S. Blinder & Michael Ehrmann & Jakob de Haan & David-Jan Jansen, 2024. "Central Bank Communication with the General Public: Promise or False Hope?," Journal of Economic Literature, American Economic Association, vol. 62(2), pages 425-457, June.
    2. Michael Ehrmann, 2026. "Trust in Central Banks," Journal of Economic Surveys, Wiley Blackwell, vol. 40(1), pages 492-504, February.
    3. Gáti, Laura & Handlan, Amy, 2025. "Reputation for Confidence," Working Paper Series 3141, European Central Bank.
    4. Hwang, In Do & Lustenberger, Thomas & Rossi, Enzo, 2023. "Central bank communication and public trust: The case of ECB speeches," Journal of International Money and Finance, Elsevier, vol. 137(C).
    5. Fadda, Pietro & Hanifi, Rayane & Istrefi, Klodiana & Penalver, Adrian, 2025. "Central bank communication of uncertainty," Journal of International Money and Finance, Elsevier, vol. 157(C).

    More about this item

    Keywords

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    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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