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ECB projections as a tool for understanding policy decisions

  • Paul Hubert

    ()

    (Ofce sciences-po)

The European Central Bank publishes inflation projections quarterly. This paper aims at establishing whether they influence private forecasts and whether they may be considered as an enhanced means of implementing policy decisions by facilitating private agents’ information processing. We provide original evidence that ECB inflation projections do influence private inflation expectations. We also find that ECB projections give information about future ECB rate movements, and that the ECB rate has different effects if complemented or not with the publication of ECB projections. We conclude that ECB projections enable private agents to correctly interpret and predict policy decisions.

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File URL: http://www.ofce.sciences-po.fr/pdf/dtravail/WP2013-04.pdf
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Paper provided by Observatoire Francais des Conjonctures Economiques (OFCE) in its series Documents de Travail de l'OFCE with number 2013-04.

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Date of creation: Feb 2013
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Handle: RePEc:fce:doctra:1304
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