We implement a repeated version of the Barro-Gordon monetary policy game in the laboratory and ask whether reputation serves as a substitute for commitment, enabling the central bank to achieve the efficient Ramsey equilibrium and avoid the inefficient, time-inconsistent one-shot Nash...

While it has become clear that communication is a monetary policy tool for central banks, and extensive research has been conducted on central bank communication with financial markets, little is known so far on central bank communication with the general public. My research provides new...

We study the general problem of information design for a policymaker—a central bank—that communicates its private information (the ``state") to the public. We show that it is optimal for the policymaker to partition the state space into a finite number of ``clusters” and to communicate to...

We explore the interaction between central bank digital currencies and cryptocurrencies using a game-theoretic model. The solution of this model is characterized by a multiplicity of equilibria, delimited by the regulatory capability of the central bank and its interaction with the financial...

This paper revisits the argument that the stabilisation bias that arises under discretionary monetary policy can be reduced if policy is delegated to a policymaker with redesigned objectives. We study four delegation schemes: price level targeting, interest rate smoothing, speed limits and...

This paper employs a multi-country delegation monetary policy model and argues that a decision making mechanism based on the median voter theorem where intensity of preferences cannot play a role does not capture important aspects of policy-setting in the European Monetary Union. Replacing the...

This paper employs a multi-country delegation model of a single monetary policy and argues that a decision making mechanism based on the median voter theorem is too restrictive for capturing important aspects of monetary policy in the European Monetary Union, particularly because intensity of...

It is argued in literature that transparency may be detrimental to welfare. Morris and Shin (2002) suggest reducing the precision of public information or withholding it. The latter seems to be unrealistic. Thus, the issue is not whether central bank should disclose or not its information, but...

The Federal Reserve's ideological "support coalition" in Congress is not constant but changes over time with the mandate that it is pursuing. When the Federal Reserve (Fed) is fighting inflation, the Right supports it and the Left attacks it. But when the Fed's primary focus shifts to recession...

The paper studies an optimal switching policy between fixed and floating exchange rate regimes when the central bank dislikes losing reserves. We show that the optimal central bank intervention rule is not fully transparent in that the central bank will choose to randomize the devaluation over a...