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Monetary Policy Committee Transparency: Measurement,Determinants, and Economic Effects

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Author Info

  • Bernd Hayo

    ()
    (University of Marburg)

  • Ummad Mazhar

    (Université Libre de Bruxelles and Université de Strasbourg)

Abstract

This paper studies monetary policy committee transparency (MPCT) based on a new index that measures central bankers’ educational and professional backgrounds as disclosed through central bank websites. Based on a novel cross-sectional data set covering 75 central banks, we investigate the determinants of MPCT as well as its economic consequences. We find that past inflation, quality of institutional setup, and extent of Internet use in a country are important determinants of MPCT. MPCT has a robust and significantly negative impact on inflation variability, even after controlling for important macroeconomic variables and institutional transparency, as well as instrumenting MPCT in various ways.

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File URL: http://www.uni-marburg.de/fb02/makro/forschung/magkspapers/40-2011_hayo.pdf
File Function: First version, 2011
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Bibliographic Info

Paper provided by Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) in its series MAGKS Papers on Economics with number 201140.

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Length: 33 pages
Date of creation: 2011
Date of revision:
Publication status: Forthcoming in
Handle: RePEc:mar:magkse:201140

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Related research

Keywords: Monetary Policy Committee; Transparency; Monetary Policy Transparency; Monetary Policy; Central Banks;

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References

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Citations

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Cited by:
  1. Bernd Hayo & Matthias Neuenkirch, 2014. "Central Bank Communication in the Financial Crisis: Evidence from a Survey of Financial Market Participants," Research Papers in Economics 2014-01, University of Trier, Department of Economics.
  2. Bernd Hayo & Florian Neumeier & Matthias Uhl, 2014. "Topics in Fiscal Policy: Evidence from a Representative Survey of the German Population," MAGKS Papers on Economics 201412, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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