Three dimensions of central bank credibility and inferential expectations: The Euro zone

Timo Henckel (), Gordon D. Menzies, Peter Moffatt and Daniel Zizzo

Journal of Macroeconomics, 2019, vol. 60, issue C, 294-308

Abstract: We use the behavior of inflation among Eurozone countries to provide information about the degree of credibility of the European Central Bank (ECB) since 2008. We define credibility along three dimensions–official target credibility, cohesion credibility and anchoring credibility–and show in a new econometric framework that the latter has deteriorated in recent history; that is, price setters are less likely to rely on the ECB target when forming inflation expectations.

Keywords: Credibility; Inflation; Expectations; Anchoring; Monetary union; Inferential expectations (search for similar items in EconPapers)
JEL-codes: C51 D84 E31 E52 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: Three Dimensions of Central Bank Credibility and Inferential Expectations: The Euro Zone (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:60:y:2019:i:c:p:294-308

DOI: 10.1016/j.jmacro.2019.01.012

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