Monetary Policy Transparency in the Inflation Targeting

Mariusz Jarmuzek (), Lucjan T. Orlowski () and Artur Radziwill
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Artur Radziwill: CASE Center for Social & Economic Research

Macroeconomics from EconWPA

Abstract: This paper quantifies transparency of monetary policy in the three EU New Member States that have adopted direct inflation targeting strategy. Two measures of transparency are applied. The institutional measure reflects the extent to which a central bank discloses information that is related to the policymaking process. The behavioural measure reflects the clarity among the financial market participants about the true course of monetary policy. The paper shows an ambiguous association between the two measures of transparency, which may be attributed to the active exchange rate management policy that undermines the actual transparency proxied by the behavioural measure.

Keywords: monetary policy; institutional and behavioural transparency; direct inflation targeting; EU New Member States; European Monetary Union (search for similar items in EconPapers)
JEL-codes: E52 E58 P52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
Date: Written 2005-02-12
Note: Type of Document - pdf; pages: 32. This paper is part of research project supported by a grant from the CERGE-EI Foundation under a program of the Global Development Network
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