01857cas a2200253 a 4500 AALejournalIMF011263 230101c9999 xx r poo 0 0eng d 5.00 USD 9781463902193 1018-5941 BD-DhAAL BD-DhAAL Tang, Man-Keung. Communication of Central Bank Thinking and Inflation Dynamics / Man-Keung Tang, Xiangrong Yu. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (32 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper studies the role of central bank communication of its economic assessment in shaping inflation dynamics. Imperfect information about the central bank's assessment - or the basis for monetary policy decisions - could complicate the private sector's learning about its policy response function. We show how clear central bank communication, which facilitates agents' understanding of policy reasoning, could bring about less volatile inflation and interest rate dynamics, and afford the authorities with greater policy flexibility. We then estimate a simple monetary model to fit the Mexican economy, and use the suggested paramters to illustrate the model's quantitative implications in scenarios where the timing, nature and persistence of shocks are uncertain. Mode of access: Internet Yu, Xiangrong. IMF Working Papers; Working Paper ; No. 2011/209 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/209/001.2011.issue-209-en.xml IMF e-Library