Central banking with many voices: the communications arms race

The job of central bankers is to use the monetary powers granted to them to promote price stability, sustainable growth, and a stable financial system. They do this in an environment fraught with unavoidable uncertainties. But, in conducting policy, there is one uncertainty that policymakers can and...

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Autores principales:	Cecchetti, Stephen G., Schoenholtz, Kermit L.
Formato:	Artículo
Lenguaje:	English
Publicado:	Banco Central de Chile 2021
Materias:	BANCOS CENTRALES COMUNICACIÓN POLITICA MONETARIA MERCADO FINANCIERO BANQUEROS CENTRALES
Acceso en línea:	https://hdl.handle.net/20.500.12580/6135
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spelling	oai-20.500.12580-61352021-10-19T15:06:30Z Central banking with many voices: the communications arms race Cecchetti, Stephen G. Schoenholtz, Kermit L. BANCOS CENTRALES COMUNICACIÓN POLITICA MONETARIA MERCADO FINANCIERO BANQUEROS CENTRALES The job of central bankers is to use the monetary powers granted to them to promote price stability, sustainable growth, and a stable financial system. They do this in an environment fraught with unavoidable uncertainties. But, in conducting policy, there is one uncertainty that policymakers can and should reduce: the uncertainty they themselves create. Everyone agrees that monetary policymakers should do their best to minimize the noise that their actions add to the environment. When policy is transparent and effective, people in the economy and financial markets respond to the data, not to the policymakers. During the past quarter-century, the evolution of an ever more detailed inflation-targeting framework facilitated a vast improvement in Federal Open Market Committee (FOMC) communication. Over the same period, both the level and uncertainty of inflation have declined. We infer that since the mid-1990s, the U.S. economy has been reaping the benefits of a credible commitment to price stability, including a communications framework that reinforces that commitment. The job of central bankers is to use the monetary powers granted to them to promote price stability, sustainable growth, and a stable financial system. They do this in an environment fraught with unavoidable uncertainties. But, in conducting policy, there is one uncertainty that policymakers can and should reduce: the uncertainty they themselves create. Everyone agrees that monetary policymakers should do their best to minimize the noise that their actions add to the environment. When policy is transparent and effective, people in the economy and financial markets respond to the data, not to the policymakers. During the past quarter-century, the evolution of an ever more detailed inflation-targeting framework facilitated a vast improvement in Federal Open Market Committee (FOMC) communication. Over the same period, both the level and uncertainty of inflation have declined. We infer that since the mid-1990s, the U.S. economy has been reaping the benefits of a credible commitment to price stability, including a communications framework that reinforces that commitment. 2021-10-19T14:54:06Z 2021-10-19T14:54:06Z 2021-10 Artículo 978-956-7421-69-5 978-956-7421-70-1 (pdf) 0717-6686 https://hdl.handle.net/20.500.12580/6135 en Series on Central Banking Analysis and Economic Policies; no. 28 Serie Banca Central, análisis y políticas económicas; no. 28 Attribution-NonCommercial-NoDerivs 3.0 Chile http://creativecommons.org/licenses/by-nc-nd/3.0/cl/ .pdf Sección o Parte de un Documento p. 343-412 application/pdf Banco Central de Chile
institution	Banco Central
collection	Banco Central
language	English
topic	BANCOS CENTRALES COMUNICACIÓN POLITICA MONETARIA MERCADO FINANCIERO BANQUEROS CENTRALES
spellingShingle	BANCOS CENTRALES COMUNICACIÓN POLITICA MONETARIA MERCADO FINANCIERO BANQUEROS CENTRALES Cecchetti, Stephen G. Schoenholtz, Kermit L. Central banking with many voices: the communications arms race
description	The job of central bankers is to use the monetary powers granted to them to promote price stability, sustainable growth, and a stable financial system. They do this in an environment fraught with unavoidable uncertainties. But, in conducting policy, there is one uncertainty that policymakers can and should reduce: the uncertainty they themselves create. Everyone agrees that monetary policymakers should do their best to minimize the noise that their actions add to the environment. When policy is transparent and effective, people in the economy and financial markets respond to the data, not to the policymakers. During the past quarter-century, the evolution of an ever more detailed inflation-targeting framework facilitated a vast improvement in Federal Open Market Committee (FOMC) communication. Over the same period, both the level and uncertainty of inflation have declined. We infer that since the mid-1990s, the U.S. economy has been reaping the benefits of a credible commitment to price stability, including a communications framework that reinforces that commitment.
format	Artículo
author	Cecchetti, Stephen G. Schoenholtz, Kermit L.
author_facet	Cecchetti, Stephen G. Schoenholtz, Kermit L.
author_sort	Cecchetti, Stephen G.
title	Central banking with many voices: the communications arms race
title_short	Central banking with many voices: the communications arms race
title_full	Central banking with many voices: the communications arms race
title_fullStr	Central banking with many voices: the communications arms race
title_full_unstemmed	Central banking with many voices: the communications arms race
title_sort	central banking with many voices: the communications arms race
publisher	Banco Central de Chile
publishDate	2021
url	https://hdl.handle.net/20.500.12580/6135
work_keys_str_mv	AT cecchettistepheng centralbankingwithmanyvoicesthecommunicationsarmsrace AT schoenholtzkermitl centralbankingwithmanyvoicesthecommunicationsarmsrace
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Central banking with many voices: the communications arms race

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