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The B.E. Journal of Macroeconomics

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Qualitative and quantitative central bank communication and inflation expectations

Paul Hubert
  • Corresponding author
  • OFCE – Sciences Po, 69 quai d’Orsay, 75007 Paris, France, Phone: +33 (0)1 44 18 54 27, Fax: +33 (0)1 44 18 54 78
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Published Online: 2016-06-25 | DOI: https://doi.org/10.1515/bejm-2016-0024


We aim to investigate the simultaneous and interacted effects of central bank qualitative and quantitative communication on private inflation expectations, measured with survey and market-based measures. The effects of ECB inflation projections and Governing Council members’ speeches are identified through an instrumental-variables estimation using a principal component analysis to generate relevant instruments. We find that ECB projections have a positive effect on current-year forecasts, and that ECB projections and speeches are substitutes at longer horizons. Moreover, ECB speeches and the ECB rate reinforce the effect of ECB projections when they are consistent, and convey the same signal about inflationary pressures.

Keywords: central bank communication; European central bank; monetary policy; principal component analysis

JEL Classification: E52; E58


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About the article

Published Online: 2016-06-25

Citation Information: The B.E. Journal of Macroeconomics, Volume 17, Issue 1, 20160024, ISSN (Online) 1935-1690, ISSN (Print) 2194-6116, DOI: https://doi.org/10.1515/bejm-2016-0024.

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