Inflation Targeting and Communication; It Pays Off to Read Inflation Reports
David Navrátil and
Ales Bulir ()
No 08/234, IMF Working Papers from International Monetary Fund
Inflation-targeting central banks have a respectable track record at explaining their policy actions and corresponding inflation outturns. Using a simple forward-looking policy rule and an assessment of inflation reports, we provide a new methodology for the empirical evaluation of consistency in central bank communication. We find that the three communication tools-inflation targets, inflation forecasts, and verbal assessments of inflation factors contained in quarterly inflation reports-provided a consistent message in five out of six observations in our 2000-05 sample of Chile, the Czech Republic, Hungary, Poland, Thailand, and Sweden.
Keywords: Emerging markets; Central banks; Chile; Czech Republic; Economic forecasting; Poland; Forecasting; Hungary; Inflation targeting; Monetary policy; Sweden; Thailand; Transparency; inflation, central bank, inflation forecasts (search for similar items in EconPapers)
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