Monetary uncertainty boosts economic performance in a monetary union.
The article explores how uncertainty in a monetary union can affect the economy, focusing on the impact of unclear central bank preferences. By studying how monetary policy influences economic performance, the researchers found that moderate uncertainty can actually benefit the economy by improving stability. Additionally, countries more affected by the common monetary policy can benefit even more from this uncertainty. The central bank's communication about its preferences can also influence inflation expectations and overall economic outcomes in member countries.