Hoerova, Marie
[VerfasserIn]
;
Monnet, Cyril
[Sonstige Person, Familie und Körperschaft];
Loch-Temzelides, Ted P.
[Sonstige Person, Familie und Körperschaft]
Anmerkungen:
In: Economics Letters, Vol. 116, No. 3, pp. 617-621, 2012
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December 5, 2011 erstellt
Beschreibung:
We study credible information transmission by a benevolent short-lived central bank. We consider two possibilities: direct revelation through an announcement, versus indirect transmission through monetary policy. We show that, in the presence of externalities creating a wedge between private and social welfare, the central bank prefers to mis-report its information in some cases. Private investors then might rationally ignore announcements by the central bank. In contrast, information transmission through changes in the interest rate creates a distortion, thus lending an amount of credibility. This induces private investors to rationally take into account information revealed through monetary policy