Abstract
The effectiveness of central bank communication depends on its precision (the noise in the communication) and its accessibility (the fraction of agents it reaches). Precision and accessibility are interdependent. Most of the existing theoretical work on central bank communication focuses on one or the other. In this paper I show that accounting for their interaction is essential for optimal communication design. Within two different information structures, I show that disclosing too precise information is detrimental if it reaches a small audience, even if the alternative is no disclosure to anyone. The optimal degree of precision is increasing in the share of people who can understand it. My analysis suggests it is better to provide simple and clear statements rather than very detailed information that only few can understand.