Central bank communication and output stabilization

S.C.W. Eijffinger, M.M. Hoeberichts, M.F. Tesfaselassie

Research output: Contribution to journalArticleScientificpeer-review

6 Citations (Scopus)
415 Downloads (Pure)


Central banks around the world have a reputation for being secretive about their operations and market assessments. It is sometimes argued that central banks need flexibility and therefore cannot be fully transparent. We find that this explanation does not carry through in a forward-looking New Keynesian framework, where transparency about the central bank’s forecasting procedures improves output stabilization. We also show that higher transparency increases optimal conservatism, as the benefits from higher transparency in terms of output stabilization are greater the more conservative is the central bank.
Original languageEnglish
Pages (from-to)395-411
JournalOxford Economic Papers
Issue number2
Publication statusPublished - 2009


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