ECB Communication as a Stabilization and Coordination Device: Evidence from Ex Ante Inflation Uncertainty

Cecilia Melo Fernandes
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Cecilia Melo Fernandes: International Monetary Fund

International Journal of Central Banking, 2025, vol. 21, issue 1, 83-135

Abstract: This paper investigates the impact of ECB communication of its assessment of the economic outlook on ex ante inflation uncertainty and sheds light on how central bank information shocks operate. The results suggest that central bank information acts as a “coordination device” able to influence opinions and actions. Most importantly, it generates a “stabilizer effect” by substantially decreasing the dispersion among the inflation point forecasts, which converge toward their aggregate mean. The paper not only helps to explain the impact of central bank information but is also useful for policymakers to define a communication strategy that attenuates ex ante inflation uncertainty.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2025:q:1:a:2

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