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http://hdl.handle.net/10419/44956
  

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dc.contributor.authorSchultefrankenfeld, Guidoen_US
dc.date.accessioned2011-02-04en_US
dc.date.accessioned2011-04-15T09:44:48Z-
dc.date.available2011-04-15T09:44:48Z-
dc.date.issued2010en_US
dc.identifier.isbn978-3-86558-673-5en_US
dc.identifier.urihttp://hdl.handle.net/10419/44956-
dc.description.abstractTo assess the Bank of England Monetary Policy Committee decisions about the Official Bank Rate under forecast uncertainty, I estimate simple forecast-based interest rate rules augmented by the forecast standard deviations recovered directly from the Inflation Report fan charts. I find that interest rate decisions react to deviations of the medium-term forecasts for inflation from target in order to pursue the inflation target. Forecast inflation uncertainty has a strongly intensifying effect on this reaction. Information from output growth is utilized in the form of near-term forecasts. The associated forecast uncertainty of output growth has an attenuating effect on the interest rate reaction. When accounting for asymmetries in forecast uncertainty I find that forecast upward risks to inflation contribute to the intensifying effect of forecast inflation uncertainty. The corresponding downward risks have no significant impact. As regards output growth, asymmetries in the forecast uncertainty have no significant impact on the interest rate reaction at all. Moreover, I find that forecast risks to inflation have a direct effect on the interest rate decisions, in particular when inflation is forecast close to target.en_US
dc.language.isoengen_US
dc.publisherDt. Bundesbank Frankfurt, M.en_US
dc.relation.ispartofseriesDiscussion Paper Series 1: Economic Studies 2010,27en_US
dc.subject.jelC53en_US
dc.subject.jelE43en_US
dc.subject.jelE47en_US
dc.subject.ddc330en_US
dc.subject.keywordForecast Uncertaintyen_US
dc.subject.keywordForecast Risken_US
dc.subject.keywordBank of Englanden_US
dc.subject.keywordMonetary Policy Committeeen_US
dc.subject.keywordForecast-based Interest Rate Rulesen_US
dc.titleForecast uncertainty and the Bank of England interest rate decisionsen_US
dc.typeWorking Paperen_US
dc.identifier.ppn645263893en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
dc.identifier.repecRePEc:zbw:bubdp1:201027-
Appears in Collections:Discussion Paper Series 1: Economic Studies, Deutsche Bundesbank

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