Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/319626 
Year of Publication: 
2025
Series/Report no.: 
Deutsche Bundesbank Discussion Paper No. 12/2025
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
During the post-pandemic inflation surge, many central banks actively used communication about the inflation outlook as a policy tool to limit spillovers from realized to expected inflation. We present novel survey evidence showing that the ECB's guidance about the projected inflation path substantially lowers households' inflation expectations in times of unusually high inflation. A reassuring, positively framed non-quantitative communication style has the largest treatment effects on short-term expected inflation. Providing simple visualizations of the ECB's projected inflation path also significantly lowered inflation ex- pectations across horizons. We document substantial heterogeneity of these effects along key socio-demographic characteristics. Our findings suggest that, regarding their communication, central banks should 'keep it sophisticatedly simple (KISS)'.
Subjects: 
Inflation projections
Central Bank Communication
Inflation Expectations
Randomized Control Trial
Survey Data
JEL: 
E31
E52
E32
ISBN: 
978-3-98848-033-0
Document Type: 
Working Paper

Files in This Item:
File
Size





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