The credibility of central bank announcements

  • In this paper, we present a monetary policy game in which the central bank has a private forecast of supply and demand shocks. The public needs to form its inflationary expectations and can make use of central bank announcements. However, because of the credibility problem that the central bank faces, the public will not believe a precise announcement. By extending the arrangement proposed by Garfinkel and Oh (1995) to a model that includes private information about both demand and supply shocks, we investigate the feasibility of making imprecise credible announcements concerning the rate of inflation. Klassifikation:E52;E58

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Author:Marco Hoeberichts
Parent Title (German):Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2002,09
Series (Serial Number):CFS working paper series (2002, 09)
Document Type:Working Paper
Year of Completion:2002
Year of first Publication:2002
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2005/06/13
Tag:announcements; monetary policy; private information
GND Keyword:Geldpolitik; Glaubwürdigkeit; Asymmetrische Information
Issue:August 2002
Page Number:22
Source:CFS working paper ; 2002,09
Institutes:Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht