| Abstract: | Recent trends toward greater central bank independence and theadoption of formal inflation targeting by several countrieshave served to emphasize the importance of communication policy.In this paper, we explore some of the economic effects of publicinformation that arise whenever public information serves thedual role of conveying fundamental information as well as servingas a focal point for better coordination. More precise publicinformation is a double-edged tool. While it is very effectivein influencing actions through coordination, sometimes it canbe too effective, and coordinate actions away from fundamentals. |
