The art of central banks' forward guidance at the zero lower bound

Bennani, Hamza (2014): The art of central banks' forward guidance at the zero lower bound.

Abstract

This paper proposes to assess the usefulness of central banks forward guidance since the start of the global economic crisis. Using a novel approach, the Wordscores methodology, we reveal that since 2009, central banks do provide a temporal guidance of their accommodative policy that can be relied on and expected. Central banks communication thus gives important insights to financial markets about the persistence of their unconventional measures and in particular about the occurrence of an exit strategy.

• Item Type: MPRA Paper
• Language: English
• Keywords: central bank communication, monetary policy, forward guidance
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies

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