The influence of media use on layperson monetary policy knowledge in Germany

Abstract

We analyse German citizens' knowledge about monetary policy and the European Central Bank (ECB), as well as the public's use of mass communication media to obtain information about the ECB. We find that a person's own desire to be informed about the ECB, together with the use of various media channels to keep informed, are decisive for both (1) own perception of knowledge about the ECB and (2) actual level of knowledge. The media-related influence varies with a person's level of education and is stronger for subjective knowledge. Women are significantly less interested in or knowledgeable about both topics.

Would helicopter money be spent? New evidence for the Netherlands

“…This low awareness is consistent with the fact that the communication strategy of central banks is primarily aimed at financial markets (Blinder et al 2008). It is also consistent with the way laymen appear to acquire and process information (Hayo and Neuenkirch 2018). In addition, we asked about the name of the president of the ECB and the responsibilities of the ECB.…”

Central Bank Communication with the General Public: Promise or False Hope?

“…Italy, where many households think the main objective of the ECB's monetary policy is economic growth and few know the ECB's inflation target (Bottone, Tagliabracci, and Zevi 2021). Similarly, only 6% of German respondents were able to answer correctly three simple multiple-choice questions about the ECB (example: "what is the main objective") (Hayo and Neuenkirch 2018). Even in New Zealand, the home of inflation targeting, most firm managers know neither who heads the central bank nor what the bank's objectives are (Afrouzi, Kumar, Coibion, and Gorodnichenko 2015).…”

Households’ inflation perceptions and expectations: survey evidence from New Zealand

“…Lamla and Lein (2014) discuss the media's role in consumers' inflation expectation formation. In our framework, this effect would work through economic knowledge, an approach also taken by Hayo and Neuenkirch (2018).…”

“…A better state of actual knowledge about the subject matter implies that the individual is more likely to make rational decisions. Such knowledge depends on the individual's information search for and interest in the economic subject matter (Blinder and Krueger 2004;Hayo and Neuenkirch 2018). Most economic studies in the field use representative survey data.…”