Informal Central Bank Communication
Annette Vissing-Jorgensen
No 28276, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
Starting from a set of facts on the timing of stock returns relative to Federal Reserve decision-making, I argue that informal communication – including unattributed communication -- plays a central role in monetary policy communication. This contrasts with the standard communications framework in which communication should be public and on-the-record because it serves to ensure accountability and policy effectiveness. I lay out possible benefits of using unattributed communication as an institution, but these should be weighed against substantial costs: It runs counter to accountability to use unattributed communication, causes frustration among those trying to understand central bank intensions, and enables use of such communication by individual policymakers. Unattributed communication driven by policymaker disagreements is unambiguously welfare reducing, because it reduces policy flexibility and harms the central bank’s credibility and decision-making process. Central banks may benefit from resisting unattributed communication via expensive newsletters and increasing consensus-building efforts to reduce disagreement-driven unattributed communication.
JEL-codes: E5 G12 (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-cba, nep-cdm, nep-mac and nep-mon
Note: AP ME
References: Add references at CitEc
Citations: View citations in EconPapers (4)
Downloads: (external link)
http://www.nber.org/papers/w28276.pdf (application/pdf)
Related works:
Working Paper: Informal Central Bank Communication (2020) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:28276
Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w28276
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().