Communication is an important governance tool for monetary policy makers.
While economic agents' short term decisions do tend to be guided by concrete
monetary policy measures, the more relevant long term expectations
can only be steered indirectly through communication. According to the
neoclassical paradigm, effective communication rests on two premises. First,
to be credible, central banks have to match deeds to words (symmetry).
Second, the direction of communication is marked by strict linearity due to
the superior informational endowment of the sender central bank vis-à-vis
the receiver public sector. The European Central Banks approach to
communication reflects the neoclassical consensus. Designed on the drawing
board, the supranational central banks communication strategy is reduced to
technocracy. On the national level though, path dependent differences in the
approaches to communication continue to exist. By way of empirical
example, both the Bundesbank and the Banque de France have adjusted their
communication strategies to their countries historic, sociological and
institutional particularities. In practice, national central banks remain
embedded in national informational networks. Neither symmetry nor linearity
are vindicated.
The book addresses monetary policy decision makers, politicians in and social
scientists alike.