We develop and apply a procedure to test the welfare implications of a beauty and non-beauty contest based on survey forecasts of interest rates and yields in a large country sample over an extended period of time. In most countries, interest rate forecasts are unbiased and consistent with both...

Modern central banks increasingly value monetary policy transparency, and attempt to build credibility by communicating their decisions to the public. This paper studies whether the communication of central banks can be used to explain upcoming changes in their most important monetary policy...

What determines the stochastic path of inflation? We study this question in a monetary economy featuring imperfect information and rational expectations. The central bank follows an inflation targeting rule and communicates noisy information about the future state of the economy to market...