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Central bank transparency and the interest rate channel : Evidence from emerging economies

Author

Listed:
  • Stephanos Papadamou

    (UTH - University of Thessaly [Volos])

  • Moïse Sidiropoulos

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique, Aristotle University of Thessaloniki)

  • Eleftherios Spyromitros

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique, DUTH - Democritus University of Thrace)

Abstract

This paper highlights the essential role of central bank transparency in the transmission mechanism of monetary policy through the interest rate channel for emerging economies. It has been shown that when the central bank's monetary policy is more transparent, the transmission mechanism of that monetary policy is more effective. Highly transparent central banks do not need to be aggressive in their policy rate actions in order to more effectively produce output and price dynamics implied by monetary policy shocks.

Suggested Citation

  • Stephanos Papadamou & Moïse Sidiropoulos & Eleftherios Spyromitros, 2015. "Central bank transparency and the interest rate channel : Evidence from emerging economies," Post-Print hal-03692248, HAL.
    • Handle: RePEc:hal:journl:hal-03692248
    DOI: 10.1016/j.econmod.2014.10.016
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