A Model of Central Bank Communication

Author:

Baerg Nicole

Abstract

Chapter 3 introduces a simple bargaining model that determines how precisely (or not) committee members will communicate with the mass public. The game assumes that the monetary committee consists of an agenda-setting chair and a median committee member, who bargain over the content of an official policy statement, aiming to send a consensual public message. The equilibrium outcomes illustrate different predicted levels of vagueness in the policy statement as a consequence of whether members have alike or opposing preferences or biases. The main empirical implications investigated in the rest of the book are introduced: When the chair and member have opposing preferences, policy statements will be more precise than when the chair and the member have similar preferences; when the chair and the member have opposing preferences, the more dissimilar they are, the greater the number of edits to the policy statement; and finally, more precise economic information will attenuate the publics’ inflation expectations, reducing aggregate inflation.

Publisher

Oxford University Press

Cited by 1 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

1. Central bank communication and public trust: The case of ECB speeches;Journal of International Money and Finance;2023-10

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