We explore the consequences of losing confidence in the price-stability objective of central banks by quantifying the inflation and deflationary biases in inflation expectations. In a model with an occasionally binding zero-lower-bound constraint, we show that an inflation bias as well as a...

Do extreme events have a significant effect about textual sentiment? The purpose of this article is to highlight the need to correct the estimation of indicators of economic uncertainty. The indicators were constructed from textual data about the perspective of extreme events. For this purpose,...

What are the main narratives among the public regarding the future course of the Colombian economy, and how do they compare to those of the Central Bank of Colombia? Macroeconomic forecasts collected through surveys mainly assess observable variables; therefore, they offer little understanding...

When generating conditional forecasts in dynamic models it is common to impose the conditions as restrictions on future structural shocks. However, these conditional forecasts often ignore that there may be uncertainty about the future development of the restricted variables. Our paper therefore...

The aim of this study is to provide an overview of the main characteristics of expectations of professional forecasters, households and firms in respect of Hungarian inflation trends. In countries where an inflation targeting regime is in place, inflation expectations are of key importance from...

This paper proposes an econometric framework for nowcasting the monetary policy stance and decisions of the European Central Bank (ECB) exploiting the ow of conventional and textual data that become available between two consecutive press conferences. Decompositions of the updated nowcasts into...

This occasional paper describes how the financial stability and macroprudential policy functions are organised at the ECB. Financial stability has been a key policy function of the ECB since its inception. Macroprudential policy tasks were later conferred on the ECB by the Single Supervisory...

In the aftermath of the global financial crisis, central banks started being confronted with severe challenges that led to an unprecedented policy response in terms of the size and variety of monetary policy measures. One such measure centred on central banks communicating to the public more...

In this paper, we analyze the relationship between certain characteristics of incumbent central bank governors and their interest-rate-setting behavior. We focus on (i) occupational backgrounds, (ii) party affiliation, and (iii) experience in office and estimate augmented Taylor rules for 20...

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...