 News Management in Monetary Policy: When Central Banks Should Talk to the GovernmentHelge Berger () and Marcel Thum German Economic Review, 2000, vol. 1, issue 4, 465-493 Abstract: Central banks are often considered to be better informed about the present or future state of the economy than the government. A conservative central bank has an incentive to exploit this asymmetry by strategically managing its information policy. Strategic news management will keep the government uncertain about the state of the economy and increase the central bank's leeway for conducting a conservative monetary policy. We show that withholding information from the government is an equilibrium. However, there are also well‐defined limits to strategic information policy as the central bank has to distort monetary policy to be in line with its news management. A simple extension of our findings is that, if the government on occasion learns about the bank's true information, it will then overrule the central bank's decision on monetary policy. Date: 2000 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:germec:v:1:y:2000:i:4:p:465-493 Ordering information: This journal article can be ordered from Access Statistics for this article German Economic Review is currently edited by Bernhard Felderer, Joseph F. Francois, Ivo Welch, Urs Schweizer and David E. Wildasin More articles in German Economic Review from Verein für Socialpolitik Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.