We study transparency of monetary policy in a dynamic stochastic general equilibrium model. The economy consists of many industries and experiences both supply and demand shocks. The central bank has private information regarding these shocks and releases its forecasts of shocks under the...

We study optimal monetary policy for a small open economy in a model where both inflation and output show persistence. We incorporate habit formation into intertemporal consumption decision and modify the Calvo price setting to include indexation to past inflation. The message conveyed from this...