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Comment on “Forward guidance: Communication, commitment, or both?” by Marco Bassetto

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  • Duarte, Fernando

Abstract

•Forward guidance can be cheap talk in an infinitely repeated game with the public.•Asymmetric information is necessary for cheap talk to be useful.•The central bank can build credibility over time to make cheap talk credible.•When to use forward guidance instead of general transparency remains unclear.•Adding a lower bound on interest rates does not change the main conclusions.

Suggested Citation

  • Duarte, Fernando, 2019. "Comment on “Forward guidance: Communication, commitment, or both?” by Marco Bassetto," Journal of Monetary Economics, Elsevier, vol. 108(C), pages 87-92.
    • Handle: RePEc:eee:moneco:v:108:y:2019:i:c:p:87-92
    DOI: 10.1016/j.jmoneco.2019.09.008
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    References listed on IDEAS

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