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Monetary Policy Committees, Learning and Communication

Anke Weber

No 2010/085, IMF Working Papers from International Monetary Fund

Abstract: This paper considers optimal communication by monetary policy committees in a model of imperfect knowledge and learning. The main policy implications are that there may be costs to central bank communication if the public is perpetually learning about the committee's decision-making process and policy preferences. When committee members have heterogeneous policy preferences, welfare is greater under majority voting than under consensus decision-making. Furthermore, central bank communication under majority voting is more likely to be beneficial in this case. It is also shown that a chairman with stable policy preferences who carries significant weight in the monetary policy decision-making process is welfare enhancing.

Keywords: WP; central bank (search for similar items in EconPapers)
Pages: 41
Date: 2010-04-01
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Citations: View citations in EconPapers (2)

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