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Public Opinion on Central Banks when Economic Policy is Uncertain

Klodiana Istrefi () and Anamaria Piloiu

Revue d'économie politique, 2020, vol. 130, issue 2, 283-306

Abstract: This paper investigates whether uncertainty about economic policy plays a role in shaping the credibility and reputation of the central bank in the eyes of the general public. In particular, we look at the effect of policy uncertainty for the dynamics of citizens? opinion, being trust, satisfaction or confidence, in the European Central Bank, the Bank of England and the Bank of Japan. Estimating Bayesian VARs for the period 1999-2014, we find that shocks to economic policy uncertainty induce economic contractions and relatively sharp deterioration in trust or satisfaction measures, which in general take longer than economic growth to re-build.

Keywords: policy uncertainty; central banks; public opinion; structural VAR (search for similar items in EconPapers)
Date: 2020
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