Central Bank Transparency and the Persistence of ‘Very High’ Inflation

Carlos Giraldo (), Iader Giraldo, Jose Gomez-Gonzalez and Jorge Uribe

Documentos de trabajo from FLAR

Abstract: We study the determinants of persistently high inflation episodes using duration models. We find that central bank transparency significantly shortens the length of these periods. Using monthly data for 180 countries from 1998 to 2023, we define “very high inflation” as year-over-year inflation exceeding the 95th percentile of a country’s recent historical distribution. The duration analysis indicates that transparent central banks reduce inflation persistence by anchoring expectations and reinforcing credibility. These findings emphasize that clear communication and openness serve as key complements to formal policy frameworks, particularly when the goal is to mitigate persistently high inflation.

Keywords: Central bank transparency; inflation persistence; hazard models; inflation targeting (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 (search for similar items in EconPapers)
Pages: 12
Date: 2025-10-20
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Persistent link: https://EconPapers.repec.org/RePEc:col:000566:021690

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