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Do Central Bank forecasts influence private agents? Forecasting Performance vs. Signals

Author

Listed:
  • Paul Hubert

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

Focusing on a set of central banks that publish inflation forecasts in real time, this paper aims to establish whether central bank inflation forecasts influence private inflation forecasts. The response is positive in the five countries studied: Sweden, the United Kingdom, Canada, Switzerland, and Japan. Three hypotheses may explain this central bank influence: central bank forecasts are more accurate than private ones, are based on different information sets, and/or convey signals about future policy decisions and policymakers' preferences and objectives. We provide evidence that the source of these central banks' influence is not linked to their forecasting performance.

Suggested Citation

  • Paul Hubert, 2015. "Do Central Bank forecasts influence private agents? Forecasting Performance vs. Signals," Post-Print hal-03399242, HAL.
    • Handle: RePEc:hal:journl:hal-03399242
    DOI: 10.1111/jmcb.12227
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    More about this item

    Keywords

    Monetary policy; Imperfect information; Communication; Forecasts;
    All these keywords.

    JEL classification:

    • 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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