Communication and Monetary Policy

30 Pages Posted: 13 Dec 2005

See all articles by Jeffery D. Amato

Jeffery D. Amato

Goldman Sachs International

Stephen Morris

MIT

Hyun Song Shin

Bank for International Settlements (BIS)

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Abstract

Recent trends toward greater central bank independence and the adoption of formal inflation targeting by several countries have served to emphasise the importance of communication policy. In this paper, we explore some of the economic effects of public information that arise whenever public information serves the dual role of conveying fundamental information as well as serving as a focal point for better coordination. More precise public information is a double-edged tool. While it is very effective in influencing actions through coordination, sometimes it can be too effective, and coordinate actions away from fundamentals.

Suggested Citation

Amato, Jeffery D. and Morris, Stephen Edward and Shin, Hyun Song, Communication and Monetary Policy. BIS Working Paper No. 123. Available at SSRN: https://ssrn.com/abstract=845444

Jeffery D. Amato (Contact Author)

Goldman Sachs International ( email )

United States

Stephen Edward Morris

MIT ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

HOME PAGE: http://https://economics.mit.edu/faculty/semorris

Hyun Song Shin

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

HOME PAGE: http://www.bis.org/author/hyun_song_shin.htm

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