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Optimal Economic Transparency Author info | Abstract | Publisher info | Download info | Related research | Statistics Carl E. Walsh (Department of Economics, University of California, Santa Cruz)
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In this paper, I explore the optimal extent to which the central bank should disseminate information among private agents. Individual firms are assumed to have diverse private information, and the central bank provides public information either implicitly, by setting its policy instrument, or explicitly, by making announcements about its short-run targets. The optimal degree of economic transparency is affected differently by cost and demand shocks. More-accurate central bank forecasts of demand shocks reduce optimal transparency, while more-accurate forecasts of cost shocks increase optimal transparency. Increased persistence in demand (cost) disturbances increases (reduces) optimal transparency.
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Article provided by International Journal of Central Banking in its journal International Journal of Central Banking .
Volume (Year): 3 (2007)
Issue (Month): 1 (March)
Pages: 5-36
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Handle: RePEc:ijc:ijcjou:y:2007:q:1:a:1Contact details of provider: Postal: Centralbahnplatz 2, CH - 4002 Basel Phone: (41) 61 - 280 80 80 Fax: (41) 61 - 280 91 00 Email: Web page: http://www.ijcb.org/ More information through EDIRC
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Keywords: Find related papers by JEL classification: E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
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.:
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"Central Bank Transparency ,"
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references Cited by : (explanations , 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.)
Ichiro Muto, 2007.
"Productivity Growth, Transparency, and Monetary Policy ,"
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07-E-08, Institute for Monetary and Economic Studies, Bank of Japan.
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"Announcements and the role of policy guidance ,"
Review ,
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Pierre Gosselin, Aileen Lotz and Charles Wyplosz, 2007.
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Other versions: Acocella, Nicola & Di Bartolomeo, Giovanni & Hughes Hallett, Andrew, 2008.
"When Can Central Banks Anchor Expectations? Policy communication and controllability ,"
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"The Expected Interest Rate Path: Alignment of Expectations vs. Creative Opacity ,"
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"Endogenous Policy Announcement and Accountability for Inflation Target ,"
Discussion Papers in Economics and Business
09-06, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
[Downloadable!]
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