TY - UNPD A1 - Frenkel, Michael A1 - Jung, Jin-Kyu A1 - Rülke, Jan-Christoph T1 - Rationalizing the bias in central banks´ interest rate projections N2 - In this paper, we study the bias in interest rate projections for four central banks, namely for Czech Republic, New Zealand, Norway, and Sweden. We examine whether central bank projections are based on an asymmetric loss function and report evidence that central banks perceive an overprojection of their longer-term interest rate forecasts as twice as costly as an underprojection of the same size. We document that rationality is consistent with biased interest rate projections which contribute to explaining the central banks’ behavior. T3 - WHU – Working Paper Series in Economics - WP 17/03 KW - Interest rate forecast KW - Central bank KW - Communication KW - Asymmetric loss KW - Zinsprognose KW - Zentralbank KW - Kommunikation KW - Asymmetrischer Verlust Y1 - 2017 UR - https://opus4.kobv.de/opus4-whu/frontdoor/index/index/docId/404 UR - https://nbn-resolving.org/urn:nbn:de:hbz:992-opus4-4041 VL - 2017 IS - WP 17/03 PB - WHU - Otto Beisheim School of Management CY - Vallendar ER -