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Credible enough? Forward guidance and perceived National Bank of Poland's policy rule

Author

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  • Paweł Baranowski
  • Paweł Gajewski

Abstract

Forward guidance effectiveness is conditional upon its credibility. This policy, when taken as credible, should reduce the perceived impact of macroeconomic variables on the interest rate. Using the Taylor rule framework and employing micro-level data set, we test the perception of monetary policy in Poland among professional forecasters. Our results show that the Taylor principle is violated in the forward guidance period, which provides evidence for forward guidance credibility.

Suggested Citation

  • Paweł Baranowski & Paweł Gajewski, 2016. "Credible enough? Forward guidance and perceived National Bank of Poland's policy rule," Applied Economics Letters, Taylor & Francis Journals, vol. 23(2), pages 89-92, February.
  • Handle: RePEc:taf:apeclt:v:23:y:2016:i:2:p:89-92
    DOI: 10.1080/13504851.2015.1051651
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    References listed on IDEAS

    as
    1. Dennis, Richard, 2014. "Imperfect credibility and robust monetary policy," Journal of Economic Dynamics and Control, Elsevier, vol. 44(C), pages 218-234.
    2. Sznajderska, Anna, 2014. "Asymmetric effects in the Polish monetary policy rule," Economic Modelling, Elsevier, vol. 36(C), pages 547-556.
    3. Caraiani, Petre, 2013. "Comparing monetary policy rules in CEE economies: A Bayesian approach," Economic Modelling, Elsevier, vol. 32(C), pages 233-246.
    4. Bodenstein, Martin & Hebden, James & Nunes, Ricardo, 2012. "Imperfect credibility and the zero lower bound," Journal of Monetary Economics, Elsevier, vol. 59(2), pages 135-149.
    5. Carvalho, Carlos & Nechio, Fernanda, 2014. "Do people understand monetary policy?," Journal of Monetary Economics, Elsevier, vol. 66(C), pages 108-123.
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    Citations

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    Cited by:

    1. Bogdan CAPRARU & Norel Ionut MOISE & Andrei RADULESCU, 2015. "The Monetary Policy Of The National Bank Of Romania In The Inflation Targeting Era. A Taylor Rule Approach," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 16, pages 91-102, December.
    2. Monica Jain & Christopher S. Sutherland, 2018. "How Do Central Bank Projections and Forward Guidance Influence Private-Sector Forecasts?," Staff Working Papers 18-2, Bank of Canada.
    3. Aleksandra Halka, 2015. "Lessons from the crisis.Did central banks do their homework?," NBP Working Papers 224, Narodowy Bank Polski, Economic Research Department.
    4. repec:prg:jnlpep:v:preprint:id:631:p:1-19 is not listed on IDEAS
    5. repec:kap:compec:v:52:y:2018:i:2:d:10.1007_s10614-017-9678-4 is not listed on IDEAS
    6. repec:prg:jnlpep:v:2017:y:2017:i:5:id:631:p:523-541 is not listed on IDEAS
    7. repec:spr:empeco:v:56:y:2019:i:2:d:10.1007_s00181-017-1370-y is not listed on IDEAS
    8. Maciej Ryczkowski, 2016. "Poland as an inflation nutter:The story of successful output stabilization," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics, vol. 34(2), pages 363-392.

    More about this item

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • 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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