Transparency : can central banks commit to truthful communication?

Borradores de Economia
Number: 
711
Published: 
Classification JEL: 
E52, E58, D82
Keywords: 
Human capital agglomeration, Social returns, Private returns, Externalities, Uncertainty, Fiscal policy
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To evaluate whether transparency is beneficial, it is usual to assume that the central bank may choose one of two options, opacity versus truthful communication. However, the monetary policymaker may have incentives to misrepresent private information so