Working Paper: NBER ID: w30277
Authors: Alan S. Blinder; Michael Ehrmann; Jakob de Haan; Davidjan Jansen
Abstract: Central banks are increasingly reaching out to the general public to motivate and explain their monetary policy actions. One major aim of this outreach is to guide inflation expectations; another is to ensure accountability and create trust. This article surveys a rapidly-growing literature on central bank communication with the public. We first discuss why and how such communication is more challenging than communicating with expert audiences. Then we survey the empirical evidence on the extent to which this new outreach does in fact affect inflation expectations and trust. On balance, we see some promise in the potential to inform the public better, but many challenges along the way.
Keywords: Central Bank Communication; Inflation Expectations; Public Trust; Monetary Policy
JEL Codes: D12; D84; E52; E58; G53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Improved communication (L96) | Enhanced public trust in central banks (E58) |
| Enhanced public trust in central banks (E58) | Affects inflation expectations (E31) |
| Clarity and accessibility of information (D83) | Improved communication (L96) |
| Improved communication (L96) | Better-informed public expectations (D83) |
| Better-informed public expectations (D83) | Stabilize inflation perceptions (E31) |
| Lack of engagement from the general public (H19) | Misinterpretations of central bank communications (E52) |
| Misinterpretations of central bank communications (E52) | Adverse economic or political reactions (F69) |