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Does one word fit all? The asymmetric effects of central banks' communication policy

By Hamza Bennani

Abstract

This paper provides an extension of Morris and Shin's (2002) model (Morris, S., Shin, H. S. (2002). Social value of public information. The American Economic Review, 92(5), 1521-1534.). It considers an "interpretation bias" of the public signal sent by central banks such as the ECB or the FED. It is shown that such a bias is detrimental and should be considered when central banks implement their communication policy.

Topics: C71 - Cooperative Games, C78 - Bargaining Theory; Matching Theory, E52 - Monetary Policy, E58 - Central Banks and Their Policies
Year: 2014
OAI identifier: oai:mpra.ub.uni-muenchen.de:57150

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