Central bank’s forecasts and lack of transparency: An assessment of the effect on private expectations in a large emerging economy |
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| Institution: | 1. Fluminense Federal University, Department of Economics and National Council for Scientific and Technological Development (CNPq), Brazil;2. Federal University of Juiz de Fora, Department of Economics, Brazil;1. School of Finance, Shanghai University of Finance and Economics, China;2. Faculty of Banking and Finance, Thuongmai University, Hanoi, Viet Nam;1. Institute for East European Studies, Freie Universität Berlin, Germany;2. Laboratory for Comparative Social Research, National Research University Higher School of Economics, Moscow, Russia;3. Leuphana University, Lüneburg, Germany;4. International Center for the Study of Institutions and Development, National Research University Higher School of Economics, Moscow, Russia;1. EIPF, Ljubljana, Slovenia;2. School of Economics and Business and Institute for South-East Europe, University of Ljubljana, Slovenia;3. School of Economics and Business and Institute for South-East Europe, University of Ljubljana, Slovenia;4. School of Economics and Business and Institute for South-East Europe, University of Ljubljana, Slovenia;5. CEPR, Slovenia;1. School of Economics and Finance, University of the Witwatersrand, Johannesburg, South Africa;2. Department of Economics, College of Management Sciences, Federal University of Agriculture, Abeokuta, Nigeria;3. University of Maine, Maine, United States;1. Izmir University of Economics, Department of Economics, Türkiye;2. Dokuz Eylul University, Faculty of Business, Department of Economics, Türkiye;1. Dept. of Economics, Fordham University, USA;2. Dept. of Economics and Finance, West Chester University, USA |
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| Abstract: | We analyze whether the Central Bank of Brazil’s Inflation Reports projections influences the private’s inflation expectations. Specifically, we investigate how the central bank’s inflation forecasts affect the private sector’s inflation expectations through a qualitative and quantitative examination of the disagreement measure between them. Furthermore, we appraise if the lack of transparency resulting from the difference between the central bank’s inflation forecasts and the realized inflation affects the private’s inflation expectations. Although the findings confirm the previous studies that point out that the central bank transparency can affect the readjustment of market expectations, the results do not rule out the possibility of the central bank’s forecast and private’s inflation expectations being affected reciprocally. |
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| Keywords: | Central bank forecasts Private forecasts Inflation Central bank transparency |
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