Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240335 
Year of Publication: 
2020
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 12/2020
Publisher: 
Bank of Finland, Helsinki
Abstract: 
We measure the tone (sentiment) of the ECB's Governing Council regarding economic outlook at the time of each monetary policy meeting and use this information together with the Eurosystem/ECB staff macroeconomic projections to directly estimate the Governing Council's loss function. Our results support earlier, more indirect findings, based on reaction function estimations, that the ECB has been either more averse to inflation above 2% ceiling or that the de facto inflation aim has been considerably below 2%. Our results suggest further that an inflation aim of 2% combined with asymmetry is a plausible specification of the ECB's preferences.
Subjects: 
central bank communication
ECB
monetary policy
textual analysis
inflation target
real timeprojections
loss function
JEL: 
E31
E52
E58
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-337-9
Document Type: 
Working Paper

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