IDEAS home Printed from https://ideas.repec.org/p/cnb/wpaper/2007-14.html
   My bibliography  Save this paper

Inflation Targeting and Communication: Should the Public Read Inflation Reports or Tea Leaves?

Author

Listed:
  • Ales Bulir
  • Katerina Smidkova
  • Viktor Kotlan
  • David Navratil

Abstract

Inflation-targeting central banks have a respectable track record at explaining their policy actions and corresponding inflation outturns. Using a simple forward-looking policy rule and an assessment of inflation reports, we provide a new methodology for the empirical evaluation of consistency in central bank communication. We find that the three communication tools—inflation targets, inflation forecasts, and verbal assessments of inflation factors contained in quarterly inflation reports—provided a consistent message in five out of six observations in our 2000–05 sample of Chile, the Czech Republic, Hungary, Poland, Thailand, and Sweden.

Suggested Citation

  • Ales Bulir & Katerina Smidkova & Viktor Kotlan & David Navratil, 2007. "Inflation Targeting and Communication: Should the Public Read Inflation Reports or Tea Leaves?," Working Papers 2007/14, Czech National Bank, Research Department.
  • Handle: RePEc:cnb:wpaper:2007/14
    as

    Download full text from publisher

    File URL: http://www.cnb.cz/en/research/research_publications/cnb_wp/download/cnbwp_2007_14.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jan Filáček & Branislav Saxa, 2012. "Central Bank Forecasts as a Coordination Device: Evidence from the Czech Republic," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 6(3), pages 244-264, October.
    2. Juraj Antal & Michal Hlavacek & Tomas Holub, 2008. "Basic Characteristics of Inflation Targeting in the Czech Republic," Occasional Publications - Chapters in Edited Volumes,in: Katerina Smidkova (ed.), Evaluation of the Fulfilment of the CNB's Inflation Targets 1998-2007, chapter 2, pages 18-34 Czech National Bank, Research Department.
    3. Katerina Smidkova, 2008. "Evaluation of the Fulfilment of the CNB's Inflation Targets," Occasional Publications - Chapters in Edited Volumes,in: Katerina Smidkova (ed.), Evaluation of the Fulfilment of the CNB's Inflation Targets 1998-2007, chapter 1, pages 10-17 Czech National Bank, Research Department.
    4. Jiri Bohm & Petr Kral & Branislav Saxa, 2009. "Perception is Always Right: The CNB’s Monetary Policy in the Media," Working Papers 2009/10, Czech National Bank, Research Department.
    5. Katerina Smidkova & Aleš Bulíø, 2008. "Hits and Misses: Ten Years of Czech Inflation Targeting (Introduction)," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 58(09-10), pages 398-405, December.

    More about this item

    Keywords

    Emerging markets; forecasting; inflation targeting; monetary policy; transparency.;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cnb:wpaper:2007/14. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jan Babecky). General contact details of provider: http://edirc.repec.org/data/cnbgvcz.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.