When using zero-knowledge proofs, it’s possible to keep secret information about parameters of the macroeconomic model over multiple periodical statistical releases, for example:
- parameters of monetary policy rules on the cost of inflation relative to output, or the medium-run inflation target (e.g., “Revealing the Secrets of the Temple: The Value of Publishing Central Bank Interest Rate Projections”)
- private signals about future shocks and/or non-fundamental shocks, including private information about news (cost-push shocks, shocks to the loss function, and shocks to the natural rate of interest) (e.g., “The Delphic forward guidance puzzle in New Keynesian models”)
- potential output and potential inflation (e.g., “Forward guidance: Communication, commitment, or both?”)
Even though this information could be kept secret with private witnesses on zero-knowledge proofs, at the same time third parties are able to securely compute over the same secret information without needing to reveal anything more thanks to the Secure Spreadsheet.
On one side, the monetary policy authority inputs its private expectations about future inflation and output gap:
And on the other side, a private bank inputs its private expectations about future inflation and output gap:
After the secure computation is done, both parties will cross-check if their private expectations are lower or higher in a private way.
DISCLAIMER
The preceding is just a simplified example for illustrative purposes. In the real world, you will have to provide parameters for your specific situation.