摘要：Using a model of island economy where financial markets aggregate dispersed
information of the public, we analyze how two-way communication between the
central bank and the public affects inflation dynamics. When inflation target is
observable and credible to the public, markets provide the bank with information
about the aggregate state of the economy, and hence the bank can stabilize
inflation. However, when inflation target is unobservable or less credible, the
public updates their perceived inflation target and the information revealed
from markets to the bank becomes less perfect. The degree of uncertainty facing
the bank crucially depends on how two-way communication works
关键词：Monetary policy, central bank communication, inflation target
