In addition, the longerrun time horizon of price stability allows more flexibility in monetary policy management. On the other hand, this practice may raise the issue of dynamic (inter-temporal) inconsistency or self-consistency. If the communication policy fails to achieve its role of transmitting the Board members' common knowledge correctly to market participants and the general public, the role of transparency may be significantly eroded.
Before discussing the role of communication policy, I would like to take up the issue of transparency of policy instruments, namely the announcement of the future development of policy rates, because this practice is presumed to enhance transparency significantly, and several countries have adopted it, for instance, New Zealand, Norway and Sweden. Instruments: policy rate projections 11.