Arbeitspapier
Money talks
We study credible information transmission by a benevolent Central Bank. We consider two possibilities: direct revelation through an announcement, versus indirect information transmission through monetary policy. These two ways of transmitting information have very different consequences. Since the objectives of the Central Bank and those of individual investors are not always aligned, private investors might rationally ignore announcements by the Central Bank. In contrast, information transmission through changes in the interest rate creates a distortion, thus, lending an amount of credibility. This induces the private investors to rationally take into account information revealed through monetary policy.
- Language
-
Englisch
- Bibliographic citation
-
Series: ECB Working Paper ; No. 1091
- Classification
-
Wirtschaft
Information, Knowledge, and Uncertainty: General
Money and Interest Rates: General
Monetary Policy
- Subject
-
Information
Interest Rates
monetary policy
Geldpolitik
Glaubwürdigkeit
Politische Kommunikation
Zentralbank
Theorie
- Event
-
Geistige Schöpfung
- (who)
-
Hoerova, Marie
Monnet, Cyril
Temzelides, Ted
- Event
-
Veröffentlichung
- (who)
-
European Central Bank (ECB)
- (where)
-
Frankfurt a. M.
- (when)
-
2009
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Hoerova, Marie
- Monnet, Cyril
- Temzelides, Ted
- European Central Bank (ECB)
Time of origin
- 2009
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