Inflation Targeting and Communication : It Pays Off to Read Inflation Reports

Author/Editor:

Katerina Smídková ; Viktor Kotlán ; David Navrátil ; Ales Bulir

Publication Date:

October 1, 2008

Electronic Access:

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Summary:

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.

Series:

Working Paper No. 08/234

Subject:

Frequency:

Monthly

English

Publication Date:

October 1, 2008

ISBN/ISSN:

9781451870923/1018-5941

Stock No:

WPIEA2008234

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

42

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