Forecasting ECB monetary policy: Accuracy is a matter of geography
Monetary policy in the euro area is conducted within a multi-country, multi-cultural, and multi-lingual context. How does this heterogeneity affect the ability of economic agents to understand and to anticipate monetary policy by the European Central Bank (ECB)? Using a database of surveys of professional ECB policy forecasters in 24 countries, we find remarkable differences in forecast accuracy, and show that these have important repercussions on market behaviour. Explaining the differences in forecast accuracy, we provide evidence that they are partly related to geography and clustering around informational hubs, as well as to country-specific economic conditions. In large part this heterogeneity can be traced to differences in forecasting models.
Year of publication: |
2009
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Authors: | Berger, Helge ; Ehrmann, Michael ; Fratzscher, Marcel |
Published in: |
European Economic Review. - Elsevier, ISSN 0014-2921. - Vol. 53.2009, 8, p. 1028-1041
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Publisher: |
Elsevier |
Keywords: | Monetary policy ECB Forecast Geography Heterogeneity Taylor rule Survey data |
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