The Credibility of Central Bank Announcements

22 Pages Posted: 28 Oct 2002

See all articles by Marco Hoeberichts

Marco Hoeberichts

De Nederlandsche Bank - Research Department

Date Written: August 2002


In this paper, we present a monetary policy game in which the central bank has a private forecast of supply and demand shocks. The public needs to form its inflationary expectations and can make use of central bank announcements. However, because of the credibility problem that the central bank faces, the public will not believe a precise announcement. By extending the arrangement proposed by Garfinkel and Oh (1995) to a model that includes private information about both demand and supply shocks, we investigate the feasibility of making imprecise credible announcements concerning the rate of inflation.

Keywords: monetary policy, private information, announcements

JEL Classification: E52, E58

Suggested Citation

Hoeberichts, Marco M., The Credibility of Central Bank Announcements (August 2002). CFS Working Paper No. 2002/09. Available at SSRN: or

Marco M. Hoeberichts (Contact Author)

De Nederlandsche Bank - Research Department ( email )

P.O. Box 98
1000 AB Amsterdam
+31-20-524 2890 (Phone)
+31-20-524 2529 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics