The authors study credible information transmission by a benevolent central bank. They consider two possibilities … of transmitting information have very different consequences. Since the objectives of the central bank and those of … individual investors are not always aligned, private investors might rationally ignore announcements by the central bank. In …

In response to the global financial crisis that started in August 2007, central banks provided extraordinary amounts of … liquidity to the financial system. To investigate the effect of central bank liquidity facilities on term interbank lending … shift in model estimates after the announcement of the liquidity facilities suggests that these central bank actions did …

and the optimal policy of a central bank in response to both idiosyncratic and aggregate shocks. In particular, we … the market ex post. We show that a central bank should use different tools to manage different types of shocks …

interaction between the fiscal policy of member countries (regions) and the central monetary authority. When capital markets are …