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Monetary Policy Transparency in the Inflation Targeting

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Author Info

  • Mariusz Jarmuzek

    (CASE Center for Social & Economic Research)

  • Lucjan T. Orlowski

    (Sacred Heart University)

  • Artur Radziwill

    (CASE Center for Social & Economic Research)

Abstract

This paper quantifies transparency of monetary policy in the three EU New Member States that have adopted direct inflation targeting strategy. Two measures of transparency are applied. The institutional measure reflects the extent to which a central bank discloses information that is related to the policymaking process. The behavioural measure reflects the clarity among the financial market participants about the true course of monetary policy. The paper shows an ambiguous association between the two measures of transparency, which may be attributed to the active exchange rate management policy that undermines the actual transparency proxied by the behavioural measure.

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File URL: http://128.118.178.162/eps/mac/papers/0502/0502025.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Macroeconomics with number 0502025.

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Length: 32 pages
Date of creation: 12 Feb 2005
Date of revision:
Handle: RePEc:wpa:wuwpma:0502025

Note: Type of Document - pdf; pages: 32. This paper is part of research project supported by a grant from the CERGE-EI Foundation under a program of the Global Development Network
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Web page: http://128.118.178.162

Related research

Keywords: monetary policy; institutional and behavioural transparency; direct inflation targeting; EU New Member States; European Monetary Union;

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References

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  14. Orlowski, Lucjan T., 2001. "From inflation targeting to the euro-peg: A model of monetary convergence for transition economies," Economic Systems, Elsevier, vol. 25(3), pages 233-251, September.
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  16. Roman Matoušek & Anita Taci, 2003. "Direct Inflation Targeting and Nominal Convergence: The Czech Case," Open Economies Review, Springer, vol. 14(3), pages 269-283, July.
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  18. Alberto Alesina, 1988. "Macroeconomics and Politics," NBER Chapters, in: NBER Macroeconomics Annual 1988, Volume 3, pages 13-62 National Bureau of Economic Research, Inc.
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Cited by:
  1. nnamdi, Kelechi & ifionu, Ebele, 2013. "Exchange rate volatility and exchange rate uncertainty in Nigeria: a financial econometric analysis (1970- 2012)," MPRA Paper 48316, University Library of Munich, Germany, revised 2013.

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