Policy implications of learning from more accurate central bank forecasts

Paul Hubert

Economics Bulletin, 2015, vol. 35, issue 1, 466-474

Abstract: How might central bank communication of its internal forecasts assist the conduct of monetary policy? The literature has shown that heterogeneous expectations may have destabilizing effects on aggregate dynamics. This paper analyzes through adaptive learning the policy implications of central bank influence of private forecasts stemming from more accurate central bank forecasts. In this case, the central bank must only respect the Taylor principle to ensure macroeconomic stability, in contrast to the situation where private agents are learning from less accurate central bank forecasts.

Keywords: Adaptive Learning; Taylor Principle; Monetary Policy (search for similar items in EconPapers)
JEL-codes: D8 E5 (search for similar items in EconPapers)
Date: 2015-03-11
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2015/Volume35/EB-15-V35-I1-P51.pdf (application/pdf)

Related works:
Working Paper: Policy implications of learning from more accurate Central Bank Forecasts (2015)
Working Paper: Policy implications of learning from more accurate Central Bank Forecasts (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-14-00071

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().