Trust in the Central Bank and Inflation Expectations

Dimitris Christelis, Dimitris Georgarakos and Maarten van Rooij
Authors registered in the RePEc Author Service: Tullio Jappelli ()

No 14202, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Using micro data from the 2015 Dutch CentERpanel, we examine whether trust in the European Central Bank (ECB) influences individuals’ expectations and uncertainty about future inflation, and whether it anchors inflation expectations. We find that higher trust in the ECB lowers inflation expectations on average, and significantly reduces uncertainty about future inflation. Moreover, results from quantile regressions suggest that trusting the ECB increases (lowers) inflation expectations when the latter are below (above) the ECB’s inflation target. These findings hold after controlling for people’s knowledge about the objectives of the ECB.

Keywords: Inflation expectations; Inflation uncertainty; Anchoring; Trust in the ecb; Subjective expectations (search for similar items in EconPapers)
JEL-codes: D12 D81 E03 (search for similar items in EconPapers)
Date: 2019-12
New Economics Papers: this item is included in nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Trust in the Central Bank and Inflation Expectations (2020)
Working Paper: Trust in the central bank and inflation expectation (2020)
Working Paper: Trust in the Central Bank and Inflation Expectations (2016)
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