Inflation Reports and Models: How Well Do Central Banks Really Write?
Ales Bulir (),
Jaromir Hurnik and
Working Papers from Czech National Bank, Research Department
We offer a novel methodology for assessing the quality of inflation reports. In contrast to the existing literature, which mostly evaluates the formal quality of these reports, we evaluate their economic content by comparing inflation factors reported by the central banks with ex-post model-identified factors. Regarding the former, we use verbal analysis and coding of inflation reports to describe inflation factors communicated by central banks in real time. Regarding the latter, we use reduced-form, new ÂKeynesian models and revised data to approximate the true inflation factors. Positive correlations indicate that the reported inflation factors were similar to the true, model-identified ones and hence mark high-quality inflation reports. Although central bank reports on average identify inflation factors correctly, the degree of forward-looking reporting varies across factors, time, and countries.
Keywords: Inflation targeting; Kalman filter; modeling; monetary policy communication. (search for similar items in EconPapers)
JEL-codes: E17 E31 E32 E37 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
http://www.cnb.cz/en/research/research_publication ... ad/cnbwp_2013_03.pdf
Working Paper: Inflation Reports and Models; How Well Do Central Banks Really Write? (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cnb:wpaper:2013/03
Access Statistics for this paper
More papers in Working Papers from Czech National Bank, Research Department Contact information at EDIRC.
Bibliographic data for series maintained by Jan Babecky ().