In the pressCommentary on ECB Policy III

In an opinion piece in the Frankfurter Allgemeine Zeitung, AWI researcher Christian Conrad argues that the ECB’s inflation projections are informative for forecast horizons of up to three quarters only. By explicitly conditioning monetary policy on the behavior of the medium- to long-term projections, the ECB has overestimated its forecasting abilities, which partly explains why the ECB has responded to increasing inflationary pressures with a considerable delay. The opinion piece is based on a joint project with Zeno Enders and Gernot Müller (University of Tübingen) on the ECB's ability to forecast inflation.