Conception Alonso
- 21 September 2021
- OCCASIONAL PAPER SERIES - No. 274Work stream on monetary policy communications
- Katrin Assenmacher
- Gabriel Glöckler
- Sarah Holton
- Peter Trautmann
- Demosthenes Ioannou
- Simon Mee
- Conception Alonso
- Eleni Argiri
- Filippo Arigoni
- Klára Bakk-Simon
- Stephanie Bergbauer
- Marie Therese Bitterlich
- Jennifer Byron
- Alexandre Carvalho
- Marco Catenaro
- Evangelos Charalambakis
- Marjolein Deroose
- Michael Ehrmann
- Ricardo Fernandez
- Clodomiro Ferreira
- Giuseppe Ferrero
- Marius Gardt
- Dimitris Georgarakos
- Pavel Gertler
- Alessandro Giovannini
- Olga Goldfayn-Frank
- Robert Goodhead
- Roel Grandia
- Jenni Hellström
- Nils Hernborg
- Niko Herrala
- Mathias Hoffmann
- Patrick Huertgen
- Michael Ioannidis
- Klodiana Istrefi
- Krista Kalnberzina
- Danielle Kedan
- Geoff Kenny
- Georgi Kocharkov
- Tobias Linzert
- Marta Manrique
- Víctor Márquez
- Ricardo Mestre
- Justus Meyer
- Emanuel Mönch
- Stefano Nardelli
- Elisa Newby
- Nele Nomm
- Lora Pavlova
- Adrian Penalver
- Reet Reedik
- Kilian Rieder
- Corina Ruhe
- Anna Samarina
- Martin Šanta
- Fabian Schupp
- Guido Schultefrankenfeld
- Geert Sciot
- Maria Silgoner
- Ifigeneia Skotida
- Aliki Stylianou
- Eva Taylor
- Johannes Tischer
- Andrea Tiseno
- Michael Weber
- Bernhard Winkler
Details- Abstract
- This paper examines the importance of central bank communication in ensuring the effectiveness of monetary policy and in underpinning the credibility, accountability and legitimacy of independent central banks. It documents how communication has become a monetary policy tool in itself; one example of this being forward guidance, given its impact on inflation expectations, economic behaviour and inflation. The paper explains why and how consistent, clear and effective communication to expert and non-expert audiences is essential in an environment of an ever-increasing need by central banks to reach these audiences. Central banks must also meet the demand for more understandable information about policies and tools, while at the same time overcoming the challenge posed by the wider public’s rational inattention. Since the European Central Bank was established, the communications landscape has changed dramatically and continues to evolve. This paper outlines how better communication, including greater engagement with the wider public, could help boost people’s understanding of and trust in the Eurosystem.
- JEL Code
- E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies