A Literature Overview of the Central Bank’s Knowledge Transparency
AbstractCentral bank transparency has received great deal of attention in recent years. However, the theoretical literature has not yet reached a consensus on the effect a higher degree of transparency has on economic welfare. In this paper, we focus one aspect of transparency, the transparency of ‘knowledge’ which refers to the disclosure of central bank forecasts about economic variables. In view of the ongoing theoretical disagreement concerning the economic effects of transparency, this paper provides an overview of the literature by looking first at the earlier studies built on the time-inconsistency models in the Barro-Gordon theoretical framework. We then investigate more recent strands of literature, which rely on the assumption that central banks are credible. Last, we conclude on the economic reasons for the mixed results of models and briefly mention the scope for further research.
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Bibliographic InfoPaper provided by Research and Monetary Policy Department, Central Bank of the Republic of Turkey in its series Working Papers with number 1307.
Date of creation: 2013
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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
- E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-02 (All new papers)
- NEP-CBA-2013-03-02 (Central Banking)
- NEP-MAC-2013-03-02 (Macroeconomics)
- NEP-MON-2013-03-02 (Monetary Economics)
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