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Central bank secrecy and money surprises: international evidence


  • Michael Hutchison
  • John P. Judd


The information value of central bank announcements of projected future money growth is shown to depend both on the accuracy of the announcements and the extent to which the announcements themselves are anticipated by the public. We construct a new data set on internal Federal Reserve money projections. These projections, which are kept secret while they are in force, are comparable in many important respects with publicly announced Bank of Japan money projections. Using a derivative of the law of iterated projections, we estimate the information value of disclosure on the part of the Bank of Japan and the cost of secrecy on the part of the Federal Reserve. We find that the value of the information provided by the Bank of Japan has been small in terms of reducing money surprises, but that disclosure by the Federal Reserve would have significantly reduced money surprises in the U.S. (Revision of Working papers 90-05 and 89-02)

Suggested Citation

  • Michael Hutchison & John P. Judd, 1991. "Central bank secrecy and money surprises: international evidence," Working Papers in Applied Economic Theory 91-01, Federal Reserve Bank of San Francisco.
  • Handle: RePEc:fip:fedfap:91-01

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    Cited by:

    1. Ramon Moreno & Sun Bae Kim, 1993. "Money, interest rates and economic activity: stylized facts for Japan," Economic Review, Federal Reserve Bank of San Francisco, pages 12-24.
    2. Apergis, Nicholas, 1998. "Inflation and Uncertainty: Does the EMS Participation Play Any Role?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 13, pages 586-605.
    3. Wilson, Berry & Saunders, Anthony, 2004. "Monetary secrecy and selective disclosure: The emerging market case of Mexico's monetary reporting," Review of Financial Economics, Elsevier, vol. 13(1-2), pages 199-210.
    4. Michael M. Hutchison & John P. Judd, 1992. "Monetary announcements: the Bank of Japan and the Fed," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue apr10.


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