In their seminal paper, Morris and Shin (2002a) argued that increasing the precision of public information is not always bene.cial to social welfare. Svensson (2005) however has disputed this by saying that although feasible, the conditions for which this was true, were not at all that likely....

In situations of relative calm and certainty, policy makers have confidence in the mechanisms at work and feel capable of attaining precise and ambitious results. As the environment becomes less and less certain, policy makers are confronted with the fact that there is a trade-off between the...

We study the effects of Central Bank transparency on inflation and the output gap. We thus identify a small analytical model which concludes that transparency affects the variability of inflation and output and not their average levels. Then we examine whether this conjecture holds empirically,...

This report analyses some of the reasons mentioned in the literature as to why central banks change interest rates at discrete intervals in the face of a continuously changing environment (interest rate stepping) and why they seem to prefer to implement changes in a series of small steps...

We provide a framework for analysing the choice between optimal and robust rules in the presence of paradigm uncertainty in monetary policy. We thus provide for two issues: …rst, we discuss the conditions of uncertainty that render a robust rule a preferable substitute to optimal rules and...

We assess a New Keynesian macro-economic model that is supplemented with a micro-founded role for money in determining aggregate demand and supply in order to better describe monetary policy transmission. In this model welfare is higher if the monetary authority takes money growth explicitly...

Some central banks have a reputation for being secretive. A justification for that behavior thatwe find in the literature is that being transparent about its operations and beliefs hinders the central bank in achieving the best outcome. In other words, a central bank needs flexibility and...

In contrast to previous empirical attempts to examine the effect of increasing central bank transparency on macroeconomic magnitudes, we investigate how the link between inflation and inflation expectations alters with increasing transparency. Our motivation stems from the belief that changes in...

Recent debates about crime on the one hand and the purported deterioration of values and norms on the other hand implicitly refer to two kinds of coordination mechanisms. Crime is supposed to be a consequence of deficient material incentives in the form of detection and formal sanctions. Values...

Central banks have become more and more transparent about their monetary policy making process. In the central bank transparency literature the distinction between actual and perceived transparency is often lacking. However, as perceptions are crucial for the actions of economic agents this...