Review of Financial Studies· 2026Q1
Central Bank Economic Transparency and Managerial Learning
- 5citations
- Q1SCImago
- 2026year
Short summary
Increased central bank economic transparency (CBET) reduces managers' learning from stock prices, shifting their information focus from aggregate to firm-level data.
AI-generated from the title and abstract; the full text is not read.
Key points
- Central Bank Economic Transparency (CBET) shifts manager information focus from aggregate to firm-level data.
- CBET reduces managers' learning from stock prices.
- This effect is stronger for firms not providing guidance and with low stock noise.
- CBET is linked to lower investment efficiency.
AI-generated from the title and abstract; the full text is not read.
Abstract
Abstract Central banks increasingly disclose their private information regarding the economy’s current and future state (CBET). Consistent with CBET shifting investors’ collection and pricing of aggregate-level (where managers do not have an information advantage) toward firm-level (where managers do have an information advantage) information, we find that CBET reduces managers’ learning from stock price. The results are (1) pronounced when firms do not provide guidance and when noise trading in firms’ stock is low, and (2) robust to using the 2013–2014 amendments to the Bank of England’s Inflation Report as an exogenous shock. Additional evidence suggests that CBET lowers investment efficiency. (JEL E22, E52, M41)
The authors' abstract, as published at the source. Review of Financial Studies, 2026 · DOI ↗
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Field: Finance
FinanceEconomics, Econometrics and Finance