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Public Opinion on Central Banks when Economic Policy is Uncertain

Klodiana Istrefi () and Anamaria Piloiu

Working papers from Banque de France

Abstract: This paper investigates whether uncertainty about economic policy plays a role in shaping the credibility and reputation of the central bank in the eyes of the public. In particular, we look at the effect of policy uncertainty for the dynamics of citizens’ opinion, being trust, satisfaction or confidence, in the European Central Bank, the Bank of England and the Bank of Japan. Estimating Bayesian VARs for the period 1999-2014, we find that shocks to economic policy uncertainty induce economic contractions and relatively sharp deterioration in trust or satisfaction measures, which in general take longer than economic growth to rebuild.

Keywords: Policy Uncertainty; Central Banks; Public Opinion; Structural VAR. (search for similar items in EconPapers)
JEL-codes: E02 E31 E58 E63 P16 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2020
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac, nep-mon and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:765

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