Do Central Banks Respond  Timely to Developments in the Global Economy?

26 Pages Posted: 2 Jun 2020

See all articles by Hilde C. Bjørnland

Hilde C. Bjørnland

Norwegian School of Management (BI); Norges Bank

Leif Anders Thorsrud

Centre for Applied Macroeconomics and Commodity Prices (CAMP), BI Norwegian Business School

sepideh za

BI Norwegian Business School

Date Written: April 2020

Abstract

Our analysis suggests; they do not! We arrive at this conclusion by showing that revisions to the published interest rate path projections from the central banks in New Zealand, Norway and Sweden can be predicted by timely and forward‐looking international indicators. Furthermore, using individual country and Panel VARs, identified with an external instrument method, we show that the policy surprises induced by the predictable revisions likely contain information about how the central banks assess past, current and future economic conditions and thereby leads to a positive co‐movement between the interest rate and both financial markets and the macroeconomy.

Suggested Citation

Bjørnland, Hilde C. and Thorsrud, Leif Anders and za, sepideh, Do Central Banks Respond  Timely to Developments in the Global Economy? (April 2020). Oxford Bulletin of Economics and Statistics, Vol. 82, Issue 2, pp. 285-310, 2020, Available at SSRN: https://ssrn.com/abstract=3615248 or http://dx.doi.org/10.1111/obes.12335

Hilde C. Bjørnland (Contact Author)

Norwegian School of Management (BI) ( email )

P.O. Box 580
N-1302 Sandvika
Norway

Norges Bank ( email )

P.O. Box 1179
Oslo, N-0107
Norway

Leif Anders Thorsrud

Centre for Applied Macroeconomics and Commodity Prices (CAMP), BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

Sepideh Za

BI Norwegian Business School

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