For example, in the latest Monetary Policy Report we stated that “in coming quarters, the monetary policy rate will move along a similar path to the one that can be inferred from the different measures of private sector expectations over the two weeks prior to the statistical closing of this Report.” and in the presentation to the Senate this was clarified in more detail by stating that by the end of the year the monetary policy rate could lie in the range of twenty-five basis points more or less than its current level. In practice, and only two months after that presentation to the Senate, we have increased the monetary policy rate by one hundred basis points. In the Board’s opinion, this is necessary to prevent the latest news on inflation – both internationally and its passthrough to some domestic prices – from delaying the adjustment of inflation to its target within the policy horizon. The anchor for these decisions was the baseline scenario on which the May Monetary Policy Report was drawn up. Publication of the Monetary Policy Report is reinforced by the statements released at the end of our monthly monetary policy meetings in which we generally refer explicitly to the baseline scenario. Additionally, three weeks after each meeting takes place we publish the minutes containing the board members’ discussions which again frequently refer to the most likely scenario.
The more transparent, the more cautious board members will be in pronouncing their judgments. That is why we have decided not to reveal board members’ names in the minutes, so as not to inhibit an open, technical and independent discussion. In the pursuit of monetary policy effectiveness and predictability, we feel that the discussion itself is more important than names. A recent study by Meade and Stasavage (2008) compared the Fed’s Federal Open Market Committee discussions before and after 1993, at which time it was decided to publish detailed records of deliberations of the meetings five years after they had been held. The study concluded that knowing the transcripts were to be made public had made members of a monetary policy committee more reluctant to offer dissenting opinions. In general, transparency and its limits depend chiefly on the characteristics of the Board. For example, at one extreme we have the European Central Bank which does not keep minutes and dissent is very limited; and at the other extreme we have the Bank of England where each board member has individual responsibility. 4 Chile, like the United States, takes an intermediate stance. That’s why Blinder (2004) says, there is no “one-size-fits-all” approach to communication and transparency. Communications policy The Central Bank website carries a document called “Communications Policy” which specifies the principles and norms governing the Bank’s communication with the public.