Central bank communication and the anchoring of inflation expectations in times of above-target inflation

Last registered on February 24, 2023
View Trial History

Pre-Trial

Trial Information

General Information

Title
Central bank communication and the anchoring of inflation expectations in times of above-target inflation
RCT ID
AEARCTR-0010749
Initial registration date
January 09, 2023

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
January 23, 2023, 8:03 AM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
February 24, 2023, 5:06 AM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country
Germany
Region

Primary Investigator

Name
Giang Nghiem
Affiliation
Leibniz University Hannover
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Lena Dräger
PI Affiliation
Leibniz University Hannover
Contact Investigator
PI Name
Ami Dalloul
PI Affiliation
Leibniz University Hannover
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2023-02-03
End date
2023-02-20
Keywords
Behavior
Additional Keywords
Central bank communication, inflation expectations, anchoring of inflation expectations, trust in the central bank, randomized control trial (RCT) with information treatments
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
This study investigates which type of central bank communication helps to anchor medium-run inflation expectations in the face of above-target inflation. For this purpose, we run randomized control trials on a representative sample of German consumers as follows. First, we collect socio-demographic variables, inflation and financial literacy, general knowledge and trust in the European Central Bank (the ECB), and point inflation perceptions and expectations. Then, the respondents are randomly allocated to six groups, including five treated groups and one control group, which receives no information. Each treated group receives one of the following information: (1) a text about the ECB’s inflations projection, (2) a text about the ECB’s inflation target, (3) a text about a statement of the ECB’s president, (4) a text about the ECB’s inflations projections and a statement of the ECB’s president, and (5) a text about the ECB’s inflations target and a statement of the ECB’s president. The control group does not receive any information. The treatments allow us to compare the effect of the different information (projection, target, general statement) against the control group with no information and additionally allow us to test how combining numerical information about either the target or the projection with a text emphasizing the ECB’s determination to tackle inflation affects the anchoring.
After providing information treatments, we ask respondents the minimum and the maximum values of expected inflation over different horizons (short- and medium-run) and ask them the probability on a 0-100 scale that the average inflation expectations will be higher than the mid-point between the reported minimum and maximum. These questions allow us to measure the mean and uncertainty of posterior inflation expectations. We also ask some hypothetical questions about unexpected changes in inflation expectations, trust in the ECB's ability to deliver price stability in the medium term, as well as some questions to construct a consumer sentiment index.
We analyze the following hypotheses:
Which type of communication helps to anchor medium-run inflation expectations in the face of above-target inflation?
Which type of communication best boosts/stabilizes trust in the central bank as well as trust that the ECB can reach its inflation target?
What is the effect of different types of central bank communication on consumer sentiment?
External Link(s)

Registration Citation

Citation
Dalloul, Ami, Lena Dräger and Giang Nghiem. 2023. "Central bank communication and the anchoring of inflation expectations in times of above-target inflation." AEA RCT Registry. February 24. https://doi.org/10.1257/rct.10749-4.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2023-02-03
Intervention End Date
2023-02-20

Primary Outcomes

Primary Outcomes (end points)
1. Change between prior and posterior inflation expectations.
2. Posterior inflation forecast uncertainty.
3. Hypothetical questions about unexpected changes in inflation expectations
4. Trust in the ECB's ability in delivering price stability in the medium term
5. Individual consumer sentiment index
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
First, we collect socio-demographic variables, inflation and financial literacy, general knowledge and trust in the European Central Bank (the ECB), and point inflation perceptions and expectations. Then, the respondents are randomly allocated to six groups, including five treated groups and one control group, which receives no information. Each treated group receives one of the following information: (1) a text about the ECB’s inflations projection, (2) a text about the ECB’s inflation target, (3) a text about a statement of the ECB’s president, (4) a text about the ECB’s inflations projections and a statement of the ECB’s president, and (5) a text about the ECB’s inflations target and a statement of the ECB’s president.
After providing information treatments, we ask respondents the minimum and the maximum values of expected inflation over different horizons (short- and medium-run) and ask them the probability on a 0-100 scale that the average inflation expectations will be higher than the mid-point between the reported minimum and maximum. We also ask some hypothetical questions about unexpected changes in inflation expectations, trust in the ECB's ability to deliver price stability in the medium term, as well as some questions to construct a consumer sentiment index.
Experimental Design Details
Randomization Method
Randomization done by survey institute using a computer.
Randomization Unit
Individuals
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
6 groups of individuals
Sample size: planned number of observations
4,000 individuals
Sample size (or number of clusters) by treatment arms
665 survey respondents per group.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

There is information in this trial unavailable to the public. Use the button below to request access.

Request Information

Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials