Why Central Bankers Should Say More About Guidance

The video discusses the concept of forward guidance, a tool used by central banks to signal future policy directions. It highlights the challenges faced in maintaining the credibility of forward guidance due to unmet commitments. The importance of a clear policy framework and data dependency is emphasized, as markets rely on these to predict central bank actions. The lack of transparency and defined frameworks in central bank policies is identified as a significant issue, affecting market confidence and functionality.

In what ways can data dependency influence the decision-making process of central banks?

How does the lack of a clear framework affect the transparency of central bank policies?