central banks and households' expectations about future inflation. In a pre-registered randomized survey experiment … administered in 2022, we examine adjustment of inflation expectations when confronted with a press conference statement by the … president of the European Central Bank (ECB) articulating the bank's commitment to a 2% inflation target. First, we replicate …

We test for state-dependent bias in the European Central Bank's inflation projections. We show that the ECB tends to … underpredict when the observed inflation rate at the time of forecasting is higher than an estimated threshold of 1.8%. The bias is … most pronounced at intermediate forecasting horizons. This suggests that inflation is projected to revert towards the …

We test for state-dependent bias in the European Central Bank's inflation projections. We show that the ECB tends to … underpredict when the observed inflation rate at the time of forecasting is higher than an estimated threshold of 1.8%. The bias is … most pronounced at intermediate forecasting horizons. This suggests that inflation is projected to revert towards the …