Do Policymakers Stick to Announced Forecasts of Interest Rates?

Item Type Presentation
Abstract If central banks value the ex-post accuracy of their forecasts, previously announced interest rate paths might affect the current policy rate. We explore whether this "forecast adherence" has influenced the monetary policies of the Reserve Bank of New Zealand and the Norges Bank, the two central banks with the longest history of publishing interest rate paths. We derive and estimate a policy rule for a central bank that is reluctant to deviate from its forecasts. The rule can nest a variety of interest rate rules. We find that policymakers appear to be constrained by their most recently announced forecasts.
Authors Mirkov, Nikola
Language English
Keywords Interest rates, forecasts, Taylor rule, adherence
Subjects economics
HSG Classification contribution to scientific community
Refereed No
Date 31 May 2013
Event Title 17th ICMAIF Conference
Event Location Rethymno, Greece
Depositing User Nikola Mirkov
Date Deposited 11 Jun 2013 09:48
Last Modified 11 Jun 2013 09:50



Download (686kB) | Preview


Mirkov, Nikola: Do Policymakers Stick to Announced Forecasts of Interest Rates? 17th ICMAIF Conference. Rethymno, Greece, 31 May 2013.

Edit item Edit item