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Targeted disclosure and monetary policy flexibility: A simple model

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  • Gai, Prasanna
  • Lou, Edmund
  • Wu, Sherry X.

Abstract

We show how limited disclosure of the central bank’s private information to select audiences facilitates policy flexibility between scheduled monetary policy meetings. We also clarify when such disclosure is welfare-enhancing.

Suggested Citation

  • Gai, Prasanna & Lou, Edmund & Wu, Sherry X., 2020. "Targeted disclosure and monetary policy flexibility: A simple model," Economics Letters, Elsevier, vol. 194(C).
    • Handle: RePEc:eee:ecolet:v:194:y:2020:i:c:s0165176520302354
    DOI: 10.1016/j.econlet.2020.109371
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    References listed on IDEAS

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    Cited by:

    1. Prasanna Gai & Sherry X. Wu, 2023. "On Market‐Friendly Central Bankers," The Economic Record, The Economic Society of Australia, vol. 99(325), pages 238-252, June.

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    More about this item

    Keywords

    Central bank communication; Targeted disclosure; Market expectations;
    All these keywords.

    JEL classification:

    • 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
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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