Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence
Alan S. Blinder
Jakob De Haan
Journal of Economic Literature
no. 4, December 2008
Over the last two decades, communication has become an increasingly important
aspect of monetary policy. These real-world developments have spawned a huge new
scholarly literature on central bank communication—mostly empirical, and almost
all of it written in this decade. We survey this ever-growing literature. The evidence
suggests that communication can be an important and powerful part of the central
bank’s toolkit since it has the ability to move financial markets, to enhance the predictability
of monetary policy decisions, and potentially to help achieve central banks’
macroeconomic objectives. However, the large variation in communication strategies
across central banks suggests that a consensus has yet to emerge on what constitutes
an optimal communication strategy.
Blinder, Alan S., Michael Ehrmann, Marcel Fratzscher, Jakob De Haan, and David-Jan Jansen.
"Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence."
Journal of Economic Literature,
Central Banks and Their Policies