Are monetary surprises effective? The view of professional forecasters in Israel

Alex Ilek

International Review of Economics & Finance, 2021, vol. 76, issue C, 516-530

Abstract: We analyze the effect of the Bank of Israel monetary surprises on key variables in the Israeli economy, in the view of professional forecasters, by exploiting a unique daily dataset. We found that although the effect of monetary surprises on the exchange rate was stable over the whole sample, the pass-through from the exchange rate to inflation significantly declined after 2007. We found stability in the effect of the monetary surprises on real activity through the information channel introduced by Nakamura and Steinsson (2018). Finally, we found robust evidence that professional forecasters in Israel form their expectations rationally.

Keywords: Professional forecasters; Monetary surprises; Policy effectiveness (search for similar items in EconPapers)
JEL-codes: E37 E47 E52 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:76:y:2021:i:c:p:516-530

DOI: 10.1016/j.iref.2021.06.009

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