Monetary Policy Committees Learning And Communication

Download or read book Monetary Policy Committees, Learning and Communication written by Anke Weber and published by International Monetary Fund. This book was released on 2010-04-01 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper considers optimal communication by monetary policy committees in a model of imperfect knowledge and learning. The main policy implications are that there may be costs to central bank communication if the public is perpetually learning about the committee's decision-making process and policy preferences. When committee members have heterogeneous policy preferences, welfare is greater under majority voting than under consensus decision-making. Furthermore, central bank communication under majority voting is more likely to be beneficial in this case. It is also shown that a chairman with stable policy preferences who carries significant weight in the monetary policy decision-making process is welfare enhancing.