This is even more the case for central banks with a guaranteed independence. There is no question that transparency and accountability of monetary policy are rightly regarded as indispensable elements of public policy in a democratic society. However, central banks’ communication efforts usually go far beyond merely fulfilling such legal requirements.
This is because communication is also an important element in fostering the effectiveness of monetary policy. The importance of communication for the effectiveness of monetary policy rests on the fact that monetary policy measures influence only current short-term interest rates.