|
|
|
|
|
|
Author/Editor:
|
Tang, Man-Keung ; Yu, Xiangrong
|
|
|
|
|
|
Publication Date:
|
August 01, 2011
|
|
|
|
Electronic Access:
|
Free Full text
(PDF file size is 792KB).
Use the free
Adobe Acrobat Reader
to view this PDF file
|
|
|
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.
The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
|
|
|
|
|
Summary:
This paper studies the role of central bank communication of its economic assessment in shaping inflation dynamics. Imperfect information about the central bank’s assessment - or the basis for monetary policy decisions - could complicate the private sector’s learning about its policy response function. We show how clear central bank communication, which facilitates agents’ understanding of policy reasoning, could bring about less volatile inflation and interest rate dynamics, and afford the authorities with greater policy flexibility. We then estimate a simple monetary model to fit the Mexican economy, and use the suggested paramters to illustrate the model’s quantitative implications in scenarios where the timing, nature and persistence of shocks are uncertain.
|
|
|
|
Order a print copy
|
|
|
|
|
|
Series:
|
Working Paper No. 11/209
|
|
|
|
|
|
Subject(s):
|
Central bank role | Central banks | Inflation targeting | Mexico | Monetary policy | Transparency
|
|
|
Author's Keyword(s):
|
Information asymmetry | expectations | inflation dynamics | monetary policy |
|
|
|
|
|
|
|
|
|
|
English
|
|
|
|
|
|
|
Publication Date:
|
August 01, 2011
|
|
|
|
|
|
|
|
Format:
|
Paper
|
|
Stock No:
|
WPIEA2011209
|
|
Pages:
|
32
|
|
Price:
|
|
|
|
US$18.00 )
|
|
|
|
|
|
|
|
|
Please address any questions about this title to
publications@imf.org
|
|
|
