Central bank’s forecasts and lack of transparency: An assessment of the effect on private expectations in a large emerging economy

Helder de Mendonça (), José Simão Filho and Vanessa Castro Abreu

Economic Systems, 2023, vol. 47, issue 2

Abstract: We analyze whether the Central Bank of Brazil’s Inflation Reports projections influences the private’s inflation expectations. Specifically, we investigate how the central bank’s inflation forecasts affect the private sector’s inflation expectations through a qualitative and quantitative examination of the disagreement measure between them. Furthermore, we appraise if the lack of transparency resulting from the difference between the central bank’s inflation forecasts and the realized inflation affects the private’s inflation expectations. Although the findings confirm the previous studies that point out that the central bank transparency can affect the readjustment of market expectations, the results do not rule out the possibility of the central bank’s forecast and private’s inflation expectations being affected reciprocally.

Keywords: Central bank forecasts; Private forecasts; Inflation; Central bank transparency (search for similar items in EconPapers)
JEL-codes: E31 E37 E52 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:47:y:2023:i:2:s0939362522000978

DOI: 10.1016/j.ecosys.2022.101035

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