Central Bank Transparency and the Signal Value of Prices
Stephen Morris () and
Hyun Song Shin
Brookings Papers on Economic Activity, 2005, vol. 36, issue 2, pages 1-66
The effectiveness of monetary policy hinges on the central bank's ability to influence market expectations. Central bank transparency is a means toward this end. However, the more effective the central bank is at influencing the market's expectations, the greater is the potential for market outcomes to reflect the central bank's own assessment of the economy. The role of market prices in aggregating the information held by dispersed individual economic agents may thereby be impaired. This paper explores trade-offs involved in central bank transparency and relates them to the debates concerning the overweighting of public information in market decisions and the welfare consequences of greater provision of public information.
Keywords: macroeconomics; Central Bank Transparency; Signal Value; Prices (search for similar items in EconPapers)
JEL-codes: D82 E52 E58 (search for similar items in EconPapers)
References: Add references at CitEc
Citations View citations in EconPapers (54) Track citations by RSS feed
Downloads: (external link)
http://www.brookings.edu/~/media/Files/Programs/ES ... 005b_bpea_morris.pdf (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:bin:bpeajo:v:36:y:2005:i:2005-2:p:1-66
Access Statistics for this article
More articles in Brookings Papers on Economic Activity from Economic Studies Program, The Brookings Institution
Contact information at EDIRC.
Series data maintained by Eric Encarnacion ().