02139cas a2200313 a 4500 AALejournalIMF022491 230101c9999 xx r poo 0 0eng d 5.00 USD 9798400200748 1018-5941 BD-DhAAL BD-DhAAL End, Nicolas. Trust What You Hear : Policy Communication, Expectations, and Fiscal Credibility / Nicolas End, Gee Hee Hong. Washington, D.C. : International Monetary Fund, 2022. 1 online resource (59 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students How do policy communications on future f iscal targets af fect market expectations and beliefs about the future conduct of f iscal policy? In this paper, we develop indicators of f iscal credibility that quantify the degree to which policy announcements anchor expectations, based on the deviation of private expectations f rom official targets, for 41 countries. We find that policy announcements partly re-anchor expectations and that f iscal rules and strong fiscal institutions, as well as a good policy track record, contribute to magnifying this effect, thereby improving fiscal credibility. Conversely, empirical analysis suggests that markets reward credibility with more favorable sovereign financing conditions. Mode of access: Internet Fiscal Policies and Behavior of Economic Agents imf Fiscal Policy imf Macroeconomic Policy and Macroeconomic Aspects of Public Finance imf Structure, Scope, and Performance of Government imf Studies of Particular Policy Episodes imf Hong, Gee Hee. IMF Working Papers; Working Paper ; No. 2022/036 Full text available on IMF http://elibrary.imf.org/view/journals/001/2022/036/001.2022.issue-036-en.xml IMF e-Library