Central banks have typically targeted their communication at financial markets. Increasingly, however, many have started actively communicating with the general public. Using Dutch survey data, this column finds that the public’s knowledge of monetary policy objectives is far from perfect, and varies widely across respondents. Those with a greater understanding of ECB objectives tend to form more realistic inflation expectations. Central banks seeking to target the general public must take account of discrepancies in households’ knowledge of and interest in monetary policy.
Carin van der Cruijsen, David-Jan Jansen, Jakob de Haan, Sunday, August 23, 2015 - 00:00
Alberto Cavallo, Guillermo Crucas, Ricardo Perez-Truglia, Monday, November 10, 2014 - 00:00
David Miles, Wednesday, October 22, 2014 - 00:00
Olivier Coibion, Yuriy Gorodnichenko, Friday, October 21, 2011 - 00:00
The August 2011 meeting of the Federal Reserve's Federal Open Market Committee produced new language describing the expected path of interest rates over a two-year horizon. That language spurred a variety of interpretations, as some saw it as describing what was already expected and others interpreted it as a significant policy shift. This column examines the expected path of future interest rates and says that the new language was wholly consistent with past Fed practice.
Benjamin K. Johannsen, Andrew Levin, Wednesday, October 24, 2007 - 00:00
Recent history of long-run inflation expectations suggests reasonably well-anchored expectations in both regions, however no studies to date have compared the recent evolution and dispersion across forecasters' long-horizon projections in the United States to those in the EU. The authors of CEPR DP6536 use daily evidence from financial markets and surveys, which reveal a substantially greater degree of forecaster disagreement about long-run inflation outcomes in the United States than in the euro area.