ECB statements and interest rate predictability

The DNB Working Paper "Is a word to the wise indeed enough? ECB statements and the predictability of interest rate decisions" shows that comments by euro area central bankers contain information on future ECB interest rate decisions, but that the comments mainly reflect recent developments in macroeconomic variables.

Furthermore, models using only communication variables are outperformed by straightforward Taylor rule models. During the first years of the European Economic and Monetary Union

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