17 Pages Posted: 13 Mar 2014
Date Written: March 12, 2014
We investigate whether ECB balance sheet policy announcements in the wake of the global financial crisis have affected the ECB's monetary policy credibility as measured by long-term inflation expectations, by looking at their effects on euro area inflation swap rates of maturities up to 10 years. We consider asset purchase programmes and long-term refinancing operations with maturities above 6 months. We find that these announcements only led to a slight increase in long-term inflation expectations. We therefore find no strong evidence to suggest that ECB balance sheet policy announcements have led to much higher long-term inflation expectations, suggesting that the monetary policy credibility of the ECB has not been harmed by these policies.
Keywords: Monetary policy, central bank communication, balance sheet policies, inflation expectations
JEL Classification: E52, E58
Suggested Citation: Suggested Citation
Moessner, Richhild, Effects of ECB Balance Sheet Policy Announcements on Inflation Expectations (March 12, 2014). De Nederlandsche Bank Working Paper No. 416. Available at SSRN: https://ssrn.com/abstract=2407919 or http://dx.doi.org/10.2139/ssrn.2407919