Central Bank Communication
Since the early 1990s, communication has become a primary tool for monetary authorities in managing expectations, both of financial markets and of the wider public, and an important ingredient in making the central bank accountable. The rapidly growing literature on central bank communication clearly confirms the importance of communication in managing expectations, thereby enhancing the effectiveness of monetary policy. Yet there is a large degree of heterogeneity in communication practices across monetary authorities in the world, and there continues to be a lively and controversial debate about what constitutes an optimal communication strategy.
KeywordsAccountability Central bank Communication Expectations Financial markets Independence Inflation Monetary policy Objectives Policy decisions Predictability Transparency
JEL ClassificationsE52 E58
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