Announcements of Interest Rate Forecasts: Do Policymakers Stick to Them?
Series
SoF Working Paper Series
Type
working paper
Date Issued
2013
Author(s)
Mirkov, Nikola
;
Natvik, Gisle James
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.
Language
English
Keywords
Interest rates
forecasts
Taylor rule
adherence
HSG Classification
contribution to scientific community
Refereed
No
Publisher
SoF
Publisher place
St. Gallen
Number
2013/3
Subject(s)
Division(s)
Eprints ID
222510
File(s)![Thumbnail Image]()
Name
13_3_Mirkov et al_Announcements of Interest Rate Forecasts.pdf
Size
383.91 KB
Format
Adobe PDF
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