Inflation Targeting and Communication: It Pays Off to Read Inflation Reports
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. 2008/234
Subject:
Central bank policy rate Communications in revenue administration Economic forecasting Inflation Inflation targeting
Frequency:
Monthly
English
Publication Date:
October 1, 2008
ISBN/ISSN:
9781451870923/1018-5941
Stock No:
WPIEA2008234
Pages:
42
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