Central Bank Communication with the General Public: Survey Evidence from Germany

Abstract

This paper studies the effect of different types of monetary policy announcements on household inflation expectations based on micro data from a survey of German households. As a key feature, interviews of the survey were conducted both shortly before and after monetary policy events. This timing provides a natural experiment to identify the immediate effects of policy announcements on household inflation expectations. The availability of the survey over a period of 15 years further allows me to exploit the time-series dimension to estimate the medium-term effects of policy announcements. Policy rate announcements lead to quick and significant adjustments in household inflation expectations. Announcements about forward guidance and quantitative easing, by contrast, have no or only smaller and delayed effects.

Sebastian Rast

Research Economist

My research interests include macroeconomics, monetary policy, applied macroeconometrics and inflation expectations.