Central bank communication

Michael Ehrmann

Research Bulletin, 2006, vol. 5, 2-5

Abstract: Communication is an important part of the process of conducting monetary policy. Although central banks only have direct control over a single interest rate, usually the overnight rate, they may also attempt to influence interest rates at all maturities. Effective communication – as much as credible policy actions – is of fundamental importance for achieving these objectives. The recent changes seen in the role and practice of central bank communication have spurred a rapidly growing academic literature on this topic, on which this article reports. It shows that central bank communication is an important policy tool, with substantial effects on financial markets, and the potential to enhance the efficiency of monetary policy-making. JEL Classification: E44, E58

Keywords: central bank; communication (search for similar items in EconPapers)
Date: 2006-12
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