Transparency and Reputation: The Publication of Central Bank Forecasts
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Petra M. 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. Furthermore, the endogenous choice of transparency is analyzed. 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.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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- Advances Article
- Comparing Wealth Effects: The Stock Market versus the Housing Market
- Optimal Time-Consistent Taxation with International Mobility Of Capital
- The Great Inflation of the Seventies: What Really Happened?
- Contributions Article
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- Hiccups for HIPCs? Implications of Debt Relief for Fiscal Sustainability and Monetary Policy
- The Effects of Reducing Firing Costs in Spain: A Lost Opportunity?
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- Topics Article
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- Technology Adoption in Follower Countries: With or Without Local R&D Activities?
- Non-Scale Models of R&D-based Growth: The Market Solution
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- Matching Up the Data on Education with Economic Growth Models
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