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From actual to perceived transparency: The case of the European Central Bank

Author Info

  • van der Cruijsen, Carin A.B.
  • Eijffinger, Sylvester C.W.

Abstract

Over the last decades central banks have become much more transparent about their monetary policy making process. In the literature, the increase in central bank transparency has frequently been related to (changes in) the actions of economic actors. However, the fact that these actors might not even be aware of the increased transparency or might not perceive the central bank as any more credible or transparent as a result of it is neglected in the literature. By analyzing data of a Dutch household survey on the (perceived) transparency of the European Central Bank (ECB) we delve into those neglected issues. We find that transparency perceptions matter for inflation perceptions and expectations as well as for trust in the ECB. However, we also show that the link between actual and perceived transparency is weak. Not only because of poor transparency knowledge but also because perceived transparency is influenced by many individual and psychological characteristics.

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Article provided by Elsevier in its journal Journal of Economic Psychology.

Volume (Year): 31 (2010)
Issue (Month): 3 (June)
Pages: 388-399

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Handle: RePEc:eee:joepsy:v:31:y:2010:i:3:p:388-399
Contact details of provider: Web page: http://www.elsevier.com/locate/joep

Keywords: Perceptions Central bank transparency Questionnaire Household behavior Behavioral economics;

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Cited by:

  1. Ehrmann, Michael & Soudan, Michel & Stracca, Livio, 2012. "Explaining EU Citizens' Trust in the ECB in Normal and Crisis Times," Economics Series 289, Institute for Advanced Studies.
  2. Francesco Cendron & Gianfranco Tusset, 2014. "Central BanksÕ Transparency: Words as Signals," "Marco Fanno" Working Papers 0178, Dipartimento di Scienze Economiche "Marco Fanno".
  3. van der Cruijsen, Carin & de Haan, Jakob & Jansen, David-Jan & Mosch, Robert, 2013. "Knowledge and opinions about banking supervision: Evidence from a survey of Dutch households," Journal of Financial Stability, Elsevier, vol. 9(2), pages 219-229.
  4. Eijffinger, Sylvester C W & Hoogduin, Lex & van der Cruijsen, Carin A B, 2008. "Optimal Central Bank Transparency," CEPR Discussion Papers 6889, C.E.P.R. Discussion Papers.
  5. Ummad Mazhar, 2013. "Does Greater Transparency Stabilize Output? Evidence from Panel Data," SBP Working Paper Series 59, State Bank of Pakistan, Research Department.
  6. Neuenkirch, Edith & Hayo, Bernd, 2014. "The German Public and its Trust in the ECB: The Role of Knowledge and Information Search," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100312, Verein für Socialpolitik / German Economic Association.
  7. Neuenkirch, Edith & Hayo, Bernd, 2015. "The influence of media use on laymen s monetary policy knowledge in Germany," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113218, Verein für Socialpolitik / German Economic Association.
  8. Bernd Hayo & Ummad Mazhar, 2014. "Monetary Policy Committee Transparency: Measurement, Determinants, and Economic Effects," Open Economies Review, Springer, vol. 25(4), pages 739-770, September.
  9. Roman Horvath & Dominika Katuscakova, 2015. "Transparency and Trust: The Case of the European Central Bank," Working Papers 352, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).

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