Central Bank Communication: Never Excuse, Never Explain

Not only does democratic accountability demand that independent central banks clearly communicate and explain their policy actions, but monetary policy can be more effective if financial market participants understand what central banks are up to and why.

Pub. Date
28 April, 2022
Pub. Type
exploring central bank communication

For most of the 20th century and earlier, central banks went about their business without ever feeling the need to communicate what they were doing to the financial markets or the general public. Then from around 1990 onwards, central banks became ever more transparent, trying to make clear to the markets and the public what they were doing and why. This policy paper explores why this change came about and how successful it has been.