Actual versus Perceived Central Bank Transparency: The Case of the European Central Bank

Carin van der Cruijsen and Sylvester Eijffinger ()

No 2007-78, Discussion Paper from Tilburg University, Center for Economic Research

Abstract: Central banks have become more and more transparent about their monetary policy making process. In the central bank transparency lit- erature the distinction between actual and perceived central bank trans- parency is often lacking. However, as perceptions are crucial for the ac- tions of economic agents this distinction matters. A discrepancy between actual and perceived transparency may exist because of incomplete or in- correct transparency knowledge and other (psychological) factors. Even financial experts, the most important channel through which the central bank can influence the economy, might suffer from misaligned perceptions. We investigate the mismatch between actual and perceived transparency and its relevance by analyzing data of a Dutch household survey on the European Central Bank?s transparency. To benefit from higher trans- parency perceptions the European Central Bank might feel tempted to stress its transparency strengths, but hide its transparency weaknesses.

JEL-codes: D80 E52 E58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac and nep-mon
Date: 2007

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Working Paper: Actual Versus Perceived Central Bank Transparency: The case of the European Central Bank (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:dgr:kubcen:200778

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