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The ECB’s announcements of non-standard measures and longer-term inflation expectations

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  • Karadi, Peter

Abstract

Stable and well-anchored longer-term inflation expectations bolster the ability of the European Central Bank (ECB) to achieve its medium-term inflation objective. This article assesses the effectiveness of non-standard monetary policy measures in guiding longer-term inflation expectations in an environment where standard interest rate policy approaches the lower bound. This causal channel is identified by looking at the change in five-year-ahead inflation expectations following announcements of non-standard measures in the period since 2013. The results suggest that non-standard measures, and in particular the asset purchase programme (APP), were conducive to preventing a potential unanchoring of longer-term inflation expectations. JEL Classification: E31, E52

Suggested Citation

  • Karadi, Peter, 2017. "The ECB’s announcements of non-standard measures and longer-term inflation expectations," Research Bulletin, European Central Bank, vol. 33.
    • Handle: RePEc:ecb:ecbrbu:2017:0033:
    Note: 1871516
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    References listed on IDEAS

    as
    1. Coenen, Günter & Schmidt, Sebastian, 2016. "The role of the ECB’s asset purchases in preventing a potential de-anchoring of longer-term inflation expectations," Research Bulletin, European Central Bank, vol. 25.
    2. Breckenfelder, Johannes & De Fiore, Fiorella & Andrade, Philippe & Karadi, Peter & Tristani, Oreste, 2016. "The ECB's asset purchase programme: an early assessment," Working Paper Series 1956, European Central Bank.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Jonas Dovern & Geoff Kenny, 2020. "Anchoring Inflation Expectations in Unconventional Times: Micro Evidence for the Euro Area," International Journal of Central Banking, International Journal of Central Banking, vol. 16(5), pages 309-347, October.

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    More about this item

    Keywords

    Asset Purchase Programme; Event Study; High-Frequency Surprises; Longer-Term Inflation Expectations;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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