In the context of monetary policy, said of – central bank pronouncements, – in which words or phrases recognizable to experts – such as: “we see with great concern…” – are interwoven, – from which one can read the forthcoming measures of the central bank. – The advantage of such code words is that they can be used demonstrably via financial journalists to prepare the public for appropriate steps in monetary policy. This is also referred to as expectation management (influence on expectations) on the part of the central bank. – The disadvantage is that too much attention is focused on code words. The more detailed explanation of macroeconomic and monetary developments, which is important for understanding monetary policy, then easily recedes into the background. – The ECB avoids such expectations management and coded language in general. As a rule, all circumstances are explained in a comprehensible and transparent manner within the framework of its open-mouth policy. – See information, market-sensitive, ECB minutes, publication, forward guidance, guidance, verbal, forward guidance, Greenspeak, willingness to act, open-mouth policy, fuzziness, constructive.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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