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Central Bank Transparency: Causes, Consequences and Updates

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  • Nergiz Dincer
  • Barry Eichengreen

Abstract

We present updated estimates of central bank for 100 countries up through 2006 and use them to analyze both the determinants and consequences of monetary policy transparency in an integrated econometric framework. We establish that there has been significant movement in the direction of greater central bank transparency in recent years. Transparent monetary policy arrangements are more likely in countries with strong and stable political institutions. They are more likely in democracies, with their culture of transparency. Using these political determinants as instruments for transparency, we show that more transparency monetary policy operating procedures is associated with less inflation variability though not also with less inflation persistence.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14791.

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Date of creation: Mar 2009
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Publication status: published as Theoretical Inquiries in Law. Volume 11, Issue 1, Pages 75–123, ISSN (Online) 1565-3404, DOI: 10.2202/1565-3404.1237, January 2010
Handle: RePEc:nbr:nberwo:14791

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