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Imperfect Central Bank Communication - Information versus Distraction, Athanasios Orphanides, Spencer Dale, Pär Österholm

Abstract
Much of the information communicated by central banks is noisy or imperfect. This paper considers the potential benefits and limitations of central bank communications in a model of imperfect knowledge and learning. It is shown that the value of communicating imperfect information is ambiguous. There is a risk that the central bank can distract the public; this means that the central bank may prefer to focus its communication policies on the information it knows most about. Indeed, conveying more certain information may improve the public's understanding to the extent that it "crowds out" a role for communicating imperfect information
Table Of Contents
Contents; 1. Introduction; 2. The model; Figures; 1. The timing of the model; 3. Results; 3.1 Perfect knowledge benchmark; 3.2 Intermediate case: Private sector imperfect knowledge; 3.3 Main Case: Central bank and private sector imperfect knowledge; 2. Private sector RMSEs under different communication strategies. Private sector gains are equal to 0.03. θ = 0.60; 3. Private sector RMSEs under different communication strategies. Private sector gain used to combine forecasts is 0.03. θ = 0.60
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (33 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781451913750

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