Central Bank Forecasts as a Coordination Device: Evidence from the Czech Republic
Year: 2012 Volume: 6 Issue: 3 Pages: 244-264
Abstract: Do private analysts coordinate their forecasts via central bank forecasts? In this paper, we examine private and central bank forecasts for the Czech Republic. The evolution of the standard deviation of private forecasts as well as the distance from the central bank’s forecasts are used to study whether a coordination effect exists, how it is influenced by uncertainty, and the effects of changes in central bank communication. The results suggest that private analysts coordinate their forecasts for the interest rate and inflation, while no or limited evidence exists for the exchange rate and GDP growth.
JEL classification: E37, E47, E58, G14
Keywords: Central bank, forecast, coordination
RePEc: http://ideas.repec.org/a/fau/aucocz/au2012_244.html
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