Bundesbank Lecture: Michael Weber "Monetary Policy Communication: The Role of Medium, Messenger, and Message"

Registration:
You are welcome to participate at Festsaal (Hülßebau) or online (Zoom link). On-site participants, please register at .

Abstract:
Inflation expectations of households and firms are central determinants in all dynamic macro models. Yet, empirical evidence suggests these decision makers form expectations in a way that deviates from the assumptions in these models: on average, inflation expectations are biased upwards, are substantially dispersed across individuals, and co-move strongly with the prices of selected goods such as milk or gas.

In this talk, Michael Weber discusses several stylized facts on subjective inflation expectations, their determinants, and how inflation expectations shape individuals’ consumption, savings, and investment decisions. Finally, he reviews the recent literature on how central banks should communicate with the general public and highlight the role of the policy message, the messenger, and the medium for the effectiveness of central bank communication.

About Michael Weber:
Michael Weber is an Associate Professor of Finance at University of Chicago, Booth Business School. His research interests include asset pricing, macroeconomics, international finance, and household finance. His work on downside risk in currency markets and other asset classes earned the 2013 AQR Insight Award. He has published in leading economics and finance journals such as the American Economic Review, the Journal of Political Economy, the Review of Economic Studies, the Review of Financial Studies and the Journal of Financial Economics.