As such, communication about the possible trajectory of monetary policy tools (first, interest rates; later – also asset purchases) has become a distinct monetary policy tool unto itself. To grasp the significance of this operational shift, we can recall that communication has not always been an item on the central banks’ agenda.
Under conventional policy, for example, the IMF estimates peak output gains of 0.3 per cent in the US; 0.1 – 0.3 per cent for other advanced economies; and 0.0 – 0.2 per cent for emerging markets.