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Published online by Cambridge University Press: 10 August 2009
The fact that the public must learn about underlying economic relationships changes the nature of the optimal monetary policy…. [A] central bank should work actively to “anchor” inflation expectations within a narrow range…. [E]fficient policy in this world requires that policymakers pay attention to information (for example, from surveys) about the public's expectations of inflation and other variables; if these appear not to be converging toward the desired levels, then a policy response may be warranted.
Ben S. Bernanke (2004: 5–6)The central theme of this book is that a macroeconomic policymaker's role is to conduct policy in such a way as to enhance the public's ability to coordinate its information, expectations, and economic activities. Our view is that policy actions that facilitate the public's coordination capability are essential for ensuring a stable and predictable framework for the rules that govern social and economic interaction. When policymakers encourage coordination, one of the primary consequences is efficient macroeconomic outcomes, the full employment of resources with price stability.
There are several ideas, some prescriptive, some purely academic, that provide a foundation for this theme. First is the necessity for coordination. We use the term coordination to define the actions a person or persons take to interpret and order streams of information (primarily political and economic) and to use that information in making their economic plans.
A second idea is that coordination involves strategic interaction between policymakers and the public. This interaction can be conflictual.
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