Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/175704
Authors: 
Coenen, Günter
Ehrmann, Michael
Gaballo, Gaetano
Hoffmann, Peter
Nakov, Anton
Nardelli, Stefano
Persson, Eric
Strasser, Georg
Year of Publication: 
2017
Series/Report no.: 
ECB Working Paper 2080
Abstract: 
Monetary policy communication is particularly important during unconventional times, because high uncertainty about the economy, the introduction of new policy tools and possible limits to the central bank's toolkit could hamper the predictability of policy actions. We study how monetary policy communication should and has worked under such circumstances. Our main results relate to announcements of asset purchase programmes and the use of forward guidance. We show that announcements of asset purchase programmes have lowered market uncertainty, particularly when accompanied by a contextual release of implementation details such as the envisaged size of the programme. We also show that forward guidance reduces uncertainty more effectively when it is state-contingent or when it provides guidance about a long horizon than when it is open-ended or covers only a short horizon, and that the credibility of forward guidance is strengthened if the central bank also has embarked on an asset purchase programme.
Subjects: 
central bank communication
unconventional monetary policy
asset purchase programme
forward guidance
JEL: 
E43
E52
E58
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-2802-1
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.