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How Do Central Bank Projections and Forward Guidance Influence Private-Sector Forecasts?

Monica Jain and Christopher Sutherland

Staff Working Papers from Bank of Canada

Abstract: We construct a 23-country panel data set to consider the effect of central bank projections and forward guidance on private-sector forecast disagreement. We find that central bank projections and forward guidance matter mainly for private-sector forecast disagreement surrounding upcoming policy rate decisions and matter less for private-sector macroeconomic forecasts. Further, neither central banks’ provision of policy rate path projections nor their choice of policy rate assumption used in their macroeconomic projections appear to matter much for private-sector forecast disagreement.

Keywords: Central bank research; Inflation targets; Monetary Policy; Monetary policy communications; Transmission of monetary policy (search for similar items in EconPapers)
JEL-codes: D83 E37 E52 E58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-for, nep-mac and nep-mon
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:18-2

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