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Monetary policy communication and uncertainty

Author

Listed:
  • Tim Hampton
  • Dominick Stephens
  • Renee Philip

    (Reserve Bank of New Zealand)

Abstract

Central banks have become progressively more transparent in explaining to the public the rationale for a given monetary policy decision, often using economic projections as a vehicle for explaining policy issues. Nevertheless, increased transparency poses potential risks, particularly if the uncertainty around projected outcomes is not communicated in a way that avoids misleading readers. This article describes a number of the options available to central banks for communicating uncertainty.

Suggested Citation

  • Tim Hampton & Dominick Stephens & Renee Philip, 2003. "Monetary policy communication and uncertainty," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 66, June.
    • Handle: RePEc:nzb:nzbbul:june2003:3
    as

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    File URL: http://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Bulletins/2003/2003jun66-2hamptonphilipstephens.pdf
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    References listed on IDEAS

    as
    1. Sharon McCaw & Satish Ranchhod, 2002. "The Reserve Bank's forecasting performance," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 65, December.
    2. Georgios Chortareas & David Stasavage & Gabriel Sterne, 2002. "Does it pay to be transparent? international evidence form central bank forecasts," Review, Federal Reserve Bank of St. Louis, vol. 84(Jul), pages 99-118.
    3. Mervyn King, 1994. "Monetary policy in the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 15(3), pages 109-128, August.
    4. Tim Hampton, 2002. "The role of the Reserve Bank's macro model in the formation of interest rate projections," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 65, June.
    Full references (including those not matched with items on IDEAS)

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