by Bernd Hayoa and Matthias Neuenkirchb
Our analysis of central banks' predictability is based on a unique data set of almost 500 market participants worldwide who were asked questions with respect to the performance of the Bank of England, the Bank of Japan, the European Central Bank, and the Federal Reserve. Our results indicate a positive and economically notable relationship between central banks' ability to convey their objectives and their overall communication skills on the one hand, and market participants' perception of the banks' predictability on the other hand. The perceived importance of disseminating more specific information does not contribute to better central bank predictability.
JEL Code: E52, E58, F39.
Full article (PDF, 23 pages, 251 kb)
a Philipps-University Marburg
b University of Trier