 The role of central bank forecasts in uncertain timesJacek Kotłowski Economic Modelling, 2025, vol. 151, issue C Abstract: Disclosing macroeconomic projection is one of central bank’s key communication tools shaping expectations, which should facilitate monetary policy transmission mechanism. Existing literature indicates that central banks affect expectations of professional forecasters to a varying degree depending on the forecasted variable, forecast horizon or sample selection. We contribute to this literature by investigating this relationship with a specific focus on the role of uncertainty and inflationary environment for this process. Our estimates from a panel model on individual data show that by announcing its projections, Polish central bank affects inflation and GDP expectations of professional forecasters for all examined projection horizons. Importantly, we document that this impact is stronger in periods of large uncertainty or high inflation, in particular for longer-term horizons. Our results signify that central bank projections help private agents in separating signal from noise as in the Woodford model and provide an anchor for longer-term expectations. Keywords: Monetary policy; Central bank communication; Forecasting; Inflation expectations; Uncertainty (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:151:y:2025:i:c:s0264999325001385 DOI: 10.1016/j.econmod.2025.107143 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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