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Central bank transparency and shocks

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  • Laskar, Daniel

Abstract

According to the literature, in an expectations-augmented Phillips curve model, opacity is always preferred to transparency on central bank forecasts. By modelling the private sector's behavior explicitly, we show that transparency reduces the shocks. Consequently, transparency can be preferred.

Suggested Citation

  • Laskar, Daniel, 2010. "Central bank transparency and shocks," Economics Letters, Elsevier, vol. 107(2), pages 158-160, May.
    • Handle: RePEc:eee:ecolet:v:107:y:2010:i:2:p:158-160
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    1. Kenneth Rogoff, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(4), pages 1169-1189.
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    4. Herrendorf, Berthold, 1999. "Transparency, reputation, and credibility under floating and pegged exchange rates," Journal of International Economics, Elsevier, vol. 49(1), pages 31-50, October.
    5. Petra M. Geraats, 2002. "Central Bank Transparency," Economic Journal, Royal Economic Society, vol. 112(483), pages 532-565, November.
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    Cited by:

    1. Christoph S. Weber, 2020. "The unemployment effect of central bank transparency," Empirical Economics, Springer, vol. 59(6), pages 2947-2975, December.
    2. Ummad Mazhar, 2013. "Does Greater Transparency Stabilize Output? Evidence from Panel Data," SBP Working Paper Series 59, State Bank of Pakistan, Research Department.
    3. Julian A. Parra-Polania, 2012. "Transparency: can central banks commit to truthful communication?," Borradores de Economia 9614, Banco de la Republica.
    4. Papadamou, Stephanos & Sidiropoulos, Moïse & Spyromitros, Eleftherios, 2014. "Does central bank transparency affect stock market volatility?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 31(C), pages 362-377.
    5. Ma, Yong & Li, Shushu, 2015. "Bayesian estimation of China's monetary policy transparency: A New Keynesian approach," Economic Modelling, Elsevier, vol. 45(C), pages 236-248.
    6. Marcelo Sánchez, 2012. "Structural Reform and Transparency in a Monetary Union," Open Economies Review, Springer, vol. 23(3), pages 559-577, July.
    7. Marcelo Sánchez, 2013. "On the Limits of Transparency: The Role of Imperfect Central Bank Knowledge," International Finance, Wiley Blackwell, vol. 16(2), pages 245-271, June.

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