Can more public information raise uncertainty? The international evidence on forward guidance
Michael Ehrmann (),
Peter Hoffmann and
Georg Strasser ()
No 13977, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Central banks have used different types of forward guidance. This paper reports cross-country evidence showing that, in general, forward guidance mutes the response of government bond yields to macroeconomic news. However, calendar-based guidance with a short horizon counter-intuitively raises it. Using a stylized model where agents learn from market signals, it shows that the public release of more precise information about future rates lowers the informativeness of market signals and, as a consequence, may increase uncertainty and amplify the reaction of expectations to macroeconomic news.
Keywords: central bank communication; disagreement; forward guidance; heterogeneous beliefs; Macroeconomic news (search for similar items in EconPapers)
JEL-codes: D83 E43 E52 E58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at email@example.com
Working Paper: Can more public information raise uncertainty? The international evidence on forward guidance (2019)
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:cpr:ceprdp:13977
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=13977
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().