20 Years of Central Bank Communications, and Lessons for the Future

Tiff Macklem and Jill Vardy

RBA Annual Conference Papers from Reserve Bank of Australia

Abstract: Central bank communications have undergone profound changes over the past two decades as central banks greatly enhanced their transparency and openness in order to support their monetary policy objectives. It has become widely accepted that clear communication by central banks is important in order to enhance credibility, improve monetary policy effectiveness and reinforce accountability. Some key lessons have emerged, notably the following seven: (i) public support of inflation targeting objectives and means is essential; (ii) central bank mandates must be focused and achievable; (iii) credibility is enhanced when central banks acknowledge uncertainty; (iv) crises require a different style of communicating; (v) public demand for information has increased; (vi) central banks must deploy new ways of reaching audiences; and (vii) central banks need to listen to a wide range of stakeholders. Central bank performance is judged by results and economic outcomes, but success is more likely if central banks clearly communicate to help citizens navigate the broader economic forces at work and understand how policies affect them. These efforts improve policy decisions, reinforce legitimacy and cement public trust.

Keywords: central banks; monetary policy frameworks; communications; uncertainty; transparency; credibility; trust (search for similar items in EconPapers)
Date: 2024-10, Revised 2025-05
New Economics Papers: this item is included in nep-mon
Note: Paper presented at the RBA's annual conference 'Central Bank Communications', Sydney, 14–15 October 2024.
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