Monetary Policy Transparency:Lessons from Germany and the Eurozone
Abstract
The conduct of monetary policy emphasises institutional arrangements which make monetary policy decision-making more ‘transparent’. Judged by these institutional features neither the Bundesbank, nor the ECB, score very highly. We test for (i) agents’ average ability to anticipate policy rate changes under the Bundesbank and the ECB and (ii) and agents’ forecasting unanimity of money market rates. Rising forecasting uncertainty may either be due to a lack of ECB transparency or to larger inflation and growth forecasting errors. Our results indicate that inflation forecast spreads widened amongst private agents and that inflation forecasting uncertainty increased the forecasting spread of money market ratesDownload Info
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Paper provided by University of the West of England, Department of Economics in its series Discussion Papers with number 0410.Length: 18 pages
Date of creation: Dec 2004
Date of revision:
Handle: RePEc:uwe:wpaper:0410
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Related research
Keywords: transparency; yield curve; forecasting uncertainty; Bundesbank; ECB;Find related papers by JEL classification:
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-03-11 (All new papers)
- NEP-CBA-2006-03-11 (Central Banking)
- NEP-EEC-2006-03-11 (European Economics)
- NEP-FMK-2006-03-11 (Financial Markets)
- NEP-FOR-2006-03-11 (Forecasting)
- NEP-MAC-2006-03-11 (Macroeconomics)
- NEP-MON-2006-03-11 (Monetary Economics)
References
References listed on IDEASPlease 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.:
- Andrew G Haldane & Vicky Read, 2000. "Monetary policy surprises and the yield curve," Bank of England working papers 106, Bank of England.
- Alesina, Alberto & Summers, Lawrence H, 1993. "Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(2), pages 151-62, May.
- Kuttner, Kenneth N., 2001.
"Monetary policy surprises and interest rates: Evidence from the Fed funds futures market,"
Journal of Monetary Economics,
Elsevier, vol. 47(3), pages 523-544, June.
- Kenneth N. Kuttner, 2000. "Monetary policy surprises and interest rates: evidence from the Fed funds futures markets," Staff Reports 99, Federal Reserve Bank of New York.
- Jorge Sicilia & Gabriel Perez-Quiros, 2002.
"Is the European Central Bank (and the United States Federal Reserve) predictable?,"
Working Paper Series
192, European Central Bank.
- Gabriel Pérez Quirós & Jorge Sicilia, 2002. "Is the European Central Bank (and the United States Federal Reserve) predictable?," Banco de España Working Papers 0229, Banco de España.
- William Poole & Robert H & Rasche & Daniel L. Thornton, 2002. "Market anticipations of monetary policy actions," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 65-94.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Menno Middeldorp, 2011.
"Central bank transparency, the accuracy of professional forecasts, and interest rate volatility,"
Staff Reports
496, Federal Reserve Bank of New York.
- Menno Middeldorp, 2011. "Central Bank Transparency, the Accuracy of Professional Forecasts, and Interest Rate Volatility," Working Papers 11-12, Utrecht School of Economics.
- Tomáš Holinka, 2010. "Learning Process and Transparency of Central Bank," Politická ekonomie, University of Economics, Prague, vol. 2010(4), pages 458-470.
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