Advanced Search
MyIDEAS: Login

Economic transparency and effectiveness of monetary policy

Contents:

Author Info

  • Helder Ferreira de Mendonça
  • José Simão Filho

Abstract

Purpose – The purpose of this paper is to study if the central bank (BC) communications affect the effectiveness of the monetary policy. Design/methodology/approach – For this analysis, a new Keynesian theoretical model and the ordinary least squared methodology were used. The objective to be achieved was to determine if there is some effect of economic transparency on accountability, inflation average, output gap, interest and central bank credibility. Findings – The results highlighted that central banks with greater transparency contribute to decrease inflation rate and interest rate. The findings denote that an increase in the information quality (clarity) implies a significant change in the rate of readjustment of market expectations. Furthermore, central bank transparency contributes to anchor the public expectations and to affect long-run interest rates. Research limitations/implications – Impulse-answer research was employed to show how the central bank transparency affects the credibility of monetary authorities. Practical implications – This paper suggests that the central bank publicizes its outlook, its policy monetary decisions, its expectations and its preferences. Originality/value – The originality of the paper resides in the fact that empirical and theoretical studies were made in the single work. Also, new results were found denoting that economic transparency reduces uncertainty effect and increases the power of incentive contract made between the BC and public.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.emeraldinsight.com/Insight/viewContentItem.do;jsessionid=831929CC68142BEBC3B0B88A7717D971?contentType=Article&contentId=1636378
Download Restriction: Cannot be freely downloaded

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Emerald Group Publishing in its journal Journal of Economic Studies.

Volume (Year): 34 (2007)
Issue (Month): 6 (November)
Pages: 497-514

as in new window
Handle: RePEc:eme:jespps:v:34:y:2007:i:6:p:497-514

Contact details of provider:
Web page: http://www.emeraldinsight.com

Order Information:
Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
Email:
Web: http://www.emeraldinsight.com/jes.htm

Related research

Keywords: Economic performance; Generation and dissemination of information; Inflation; Interest rates; Monetary policy;

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. George B. Tawadros, 2009. "Testing the impact of inflation targeting on inflation," Journal of Economic Studies, Emerald Group Publishing, vol. 36(4), pages 326-342, September.
  2. Rizki E. Wimanda & Paul M. Turner & Maximilian J.B. Hall, 2012. "Monetary policy rules for Indonesia: which type is the most efficient?," Journal of Economic Studies, Emerald Group Publishing, vol. 39(4), pages 469-484, December.
  3. de Mendonça, Helder Ferreira & de Guimarães e Souza, Gustavo José, 2012. "Is inflation targeting a good remedy to control inflation?," Journal of Development Economics, Elsevier, vol. 98(2), pages 178-191.
  4. Helder Ferreira de Mendonça & Manoel Carlos de Castro Pires, 2010. "Gradualism in monetary policy and fiscal equilibrium," Journal of Economic Studies, Emerald Group Publishing, vol. 37(3), pages 327-342, September.
  5. Stergios Leventis & Panagiotis E. Dimitropoulos & Asokan Anandarajan, 2012. "Signalling by banks using loan loss provisions: the case of the European Union," Journal of Economic Studies, Emerald Group Publishing, vol. 39(5), pages 604-618, December.
  6. Hamid Baghestani & Barry Poulson, 2012. "Federal Reserve forecasts of nonfarm payroll employment across different political regimes," Journal of Economic Studies, Emerald Group Publishing, vol. 39(3), pages 280-289, December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. de Mendonça, Helder Ferreira & de Guimarães e Souza, Gustavo José, 2012. "Is inflation targeting a good remedy to control inflation?," Journal of Development Economics, Elsevier, vol. 98(2), pages 178-191.
  2. de Mendonça, Helder Ferreira & de Siqueira Galveas, Karine Alves, 2013. "Transparency and inflation: What is the effect on the Brazilian economy?," Economic Systems, Elsevier, vol. 37(1), pages 69-80.
  3. Gabriel Barros Tavares Peixoto & Gabriel Caldas Montes, 2014. "Risk-Taking Channel, Bank Lendingchannel And The “Paradox Of Credibility”: Empirical Evidence For Brazil," Anais do XL Encontro Nacional de Economia [Proceedings of the 40th Brazilian Economics Meeting] 030, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  4. Osama D. Sweidan, 2011. "Monetary policy inertia: case of Jordan," Journal of Economic Studies, Emerald Group Publishing, vol. 38(2), pages 144-155, May.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eme:jespps:v:34:y:2007:i:6:p:497-514. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jade Turvey).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.