Does one word fit all? The asymmetric effects of central banks' communication policy

Bennani, Hamza (2014): Does one word fit all? The asymmetric effects of central banks' communication policy.

Abstract

This paper provides an extension of Morris and Shin's (2002) model (Morris, S., Shin, H. S. (2002). Social value of public information. The American Economic Review, 92(5), 1521-1534.). It considers an "interpretation bias" of the public signal sent by central banks such as the ECB or the FED. It is shown that such a bias is detrimental and should be considered when central banks implement their communication policy.

• Item Type: MPRA Paper
• Language: English
• Keywords: central bank communication, monetary policy, public information.
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C71 - Cooperative Games; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory ; Matching Theory; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies

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