DP14265 The 3 E's of Central Bank Communication with the Public
|Author(s):||Andrew Haldane, Alistair Macaulay, Michael McMahon|
|Publication Date:||January 2020|
|Keyword(s):||communication, General Public, monetary policy|
|Programme Areas:||Monetary Economics and Fluctuations|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=14265|
In this paper we explore both theoretical and empirical evidence on communication with the general public. The model provides guidance for policy makers by high- lighting some potentially important risks in communicating simply with a broader audience. In particular, in a model where trust and engagement are low, there are benefits to engaging a wider audience. But doing so risks ultimately lowering welfare unless guided by the 3 E's of public communication: Explanation, Engagement and Education. Central banks have made great strides in all three, but numerous challenges remain.