Over-reaction to Policy Signals, and Central Bank Optimal Communication Policy

• Main Authors: Ahmad-Reza Jalali Naini, Mohammad-Amin Naderian
• Format: Article in Journal/Newspaper
• Language: unknown
• Subjects: Lucas Island
• Online Access: http://www.cbcg.me/repec/cbk/journl/vol5no3-9.pdf

This paper reviews the theoretical arguments and counter arguments regarding central bank optimal communication policy in an environment with imperfect common knowledge and strategic complementarity. More specifically, the paper discusses the environment in which full transparency is no longer neces...