These longer interest rates have an impact on the economy through capital costs, the stock market, the exchange rate, and other asset prices (Blinder 1998, D’Amico, English, López-Salido, and Nelson 2011, Woodford 2005). It would therefore seem that publishing a policy-rate path would be the most direct way to affect interest-rate expectations, especially since central banks should have better information about their own intentions than anyone else. Publication of the central bank’s assessment of the future path for the policy rate is thus a separate tool in the monetary policymaker’s toolbox. This tool can be particularly useful 6  BIS central bankers’ speeches  when the policy rate has reached the effective zero lower bound, and there is a need for even more expansionary policy. Given this, it may seem a mystery why still so few central banks choose to publish a policy-rate path, when an increasing number of central banks are publishing forecasts of inflation and the real economy. I welcome very much that “[t]he FOMC continues to explore ways to further increase transparency about its forecasts and policy plans” (Bernanke 2011a). Global interest rates and emerging-market capital inflows Emerging-market economies have been subject to increased inflows of foreign capital over the last few years, and some emerging-market policymakers have expressed concerns about the related risks of bubbles and other negative effects.

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