Monetary Policy Transparency and Uncertainty: A Comparison between the Bank of England and the Bundesbank/ECB
AbstractIt is widely believed that institutional arrangements influence the quality of monetary policy outcomes. Judged on its ‘transparency’ characteristics, therefore the Bank of England should do better than the Bundesbank/ECB. We show that this is not confirmed by agents’ ability to anticipate central bank decisions. Furthermore, benefits from transparency should also show in a narrowing of the diversity in cross sectional forecasts. We show that the diversity in interest rate forecasts is no greater under the Bundesbank/ECB than the Bank of England. This suggests that other factors than ‘transparency’ may affect interest rate uncertainty. Increasing difficulty in forecasting inflation appears to play a part in the UK while being less of a problem in Germany.
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Bibliographic InfoPaper provided by University of the West of England, Department of Economics in its series Discussion Papers with number 0508.
Length: 22 pages
Date of creation: Oct 2005
Date of revision:
transparency; yield curve; forecasting uncertainty; Bank of England; 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-FMK-2006-03-11 (Financial Markets)
- NEP-FOR-2006-03-11 (Forecasting)
- NEP-MAC-2006-03-11 (Macroeconomics)
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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