Central Bank Communication,Inflatin Expectations Management And Macroeconomic Fluctuations

Since China's economy has entered a New Normal,the domestic economic and financial situation increasingly complex,macroeconomic growth rate slowdown,overcapacity highlighted,the accumulation of debt risk and many other problems become more prominent.These problems greatly enhance the public's uncertainty about the future economic expectations,resulting in sharp fluctuations in output and prices.With the traditional monetary policy tools in the management of economic fluctuations often fail,in recent years,China's government began to gradually strengthen the public expected management.As Expectation Management has the advantage of short time lag and low cost,it is increasingly sought after by Central Banks as a way of macro control.It is a important issue that how to control macroeconomic fluctuations through Central Bank Communication which is a the most direct and effective means of public Expectations ManagementBased on the perspective of Central Bank Communication,this paper examines the ability of inflation expectation management to balance the fluctuation of macroeconomic through depicting the influence mechanism of Central Bank Communication on public expectation in the DSGE model.Because public sentiment will be affected by the economic stage,and public sentiment will affect the expected formation mechanism of the public,this paper divides the economic stage into the periods of boom and bust,respectively under Central Bank Communication examines the inflation expectation management irons the macroeconomic fluctuation ability.The study found that Central Bank Communication can significantly reduce the impact of the shocks of inflation expectation bias on macroeconomic variables and the sustainability of the economy deviating from the steady state while it's not.Moreover,due to the public's expected formation mechanism is affected by public sentiment,the effect of the bias shocks on the macro economy in the period of economic depression is significantly smaller than that in the economic boom.Based on the above conclusion: Firstly,the central bank should strengthen the accuracy and completeness of the information disclosure,reduce the uncertainty of public future economic expectations and guide the public expectation to become more rational,so as to reduce the stickiness of the economic cycle;Secondly,the central bank increases the transparency of monetary policy by accurate communication to the public,to avoid the formation of "information noise" or increasing cost and difficulty in the public's information processing;thirdly,we should pay more attention to the way of information communication and communication strategies in different stages;we should pay attention to the information feedback process of the market,and improve the bidirectional the Central Bank Communication.Finally,the implementation of multi-objective system in different economic stages should be focused on the effectiveness of policy objectives.