nep-cba New Economics Papers
on Central Banking
Issue of 2005‒01‒09
one paper chosen by
Roberto Santillan

  1. Transparency and Reputation: The Publication of Central Bank Forecasts By Petra Geraats

  1. By: Petra Geraats
    Abstract: Transparency has become one of the key features of monetary policy. This paper analyzes the reputational incentives related to transparency, focusing on the publication of central bank forecasts. A simple dynamic monetary policy game shows how transparency reduces inflation, as has been found empirically. Although transparency exposes weak central banks, the negative market feedback in response to secrecy could provide a sufficiently strong inducement to become transparent. Thus, reputational concerns could lead to transparency, even without formal disclosure requirements.
    Keywords: transparency, monetary policy, central bank forecasts
    JEL: D82 E42 E52 E58
    Date: 2004–12

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