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Trust in the central bank and inflation expectation

Dimitris Christelis (), Dimitris Georgarakos (), Tullio Jappelli () and Maarten van Rooij ()

No 2375, Working Paper Series from European Central Bank

Abstract: Using micro data from the 2015 Dutch CentERpanel, we examine whether trust in the European Central Bank (ECB) influences individuals’ expectations and uncertainty about future inflation, and whether it anchors inflation expectations. We find that higher trust in the ECB lowers inflation expectations on average, and significantly reduces uncertainty about future inflation. Moreover, results from quantile regressions suggest that trusting the ECB increases (lowers) inflation expectations when the latter are below (above) the ECB’s inflation target. These findings hold after controlling for people’s knowledge about the objectives of the ECB. JEL Classification: D12, D81, E03, E40, E58

Keywords: anchoring; consumer expectations; inflation uncertainty; trust in the ECB (search for similar items in EconPapers)
Date: 2020-02
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac and nep-mon
Note: 483508
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Related works:
Working Paper: Trust in the Central Bank and Inflation Expectations (2019) Downloads
Working Paper: Trust in the central bank and inflation expectations (2016) Downloads
Working Paper: Trust in the Central Bank and Inflation Expectations (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20202375

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