Cover IMF Working Papers
Imperfect Central Bank Communication - Information versus Distraction
Author:
Athanasios Orphanidesnull

Search for other papers by Athanasios Orphanides in
Current site
Google Scholar
PubMedClose
,
Spencer Dalenull

Search for other papers by Spencer Dale in
Current site
Google Scholar
PubMedClose
, and
Pär Österholm
Search for other papers by Pär Österholm in
Current site
Google Scholar
PubMedClose
Series:
IMF Working Papers
Volume/Issue:
Volume 2008: Issue 060
Language:
English
Publication Date:
01 Mar 2008
DOI:
https://doi.org/10.5089/9781451869224.001
ISBN:
9781451869224
ISSN:
1018-5941
Pages:
31
Keywords:
WP; central bank communications; inflation expectation
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Download PDF (433.7 KB) Download Epub
Much of the information communicated by central banks is noisy or imperfect. This paper considers the potential benefits and limitations of central bank communications in a model of imperfect knowledge and learning. It is shown that the value of communicating imperfect information is ambiguous. There is a risk that the central bank can distract the public; this means that the central bank may prefer to focus its communication policies on the information it knows most about. Indeed, conveying more certain information may improve the public's understanding to the extent that it "crowds out" a role for communicating imperfect information.
  • Collapse
  • Expand
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2008: Issue 060