Transparency versus Openness in Monetary Policy

Emmanuel Carré

Chapter 4 in Issues in Finance and Monetary Policy, 2007, pp 47-72 from Palgrave Macmillan

Abstract: Abstract The revolution of central banking from a position of secrecy to one of transparency has been widely observed (Goodfriend, 1986). This trend is considered as being desirable by proponents of what may be termed the ‘credibility strategy’ (see, for example, Kydland and Prescott, 1977; Svensson, 1997). In the credibility strategy, transparency is seen as the most efficient solution to the major problem facing the effective implementation of monetary policy, namely, time inconsistency (Geraats, 2001). As a key feature of inflation, transparency in inflation targeting has come to be seen as increasingly important with the implementation of this monetary policy regime.

Keywords: Monetary Policy; Rational Expectation; Price Stability; Credibility Strategy; Inflation Target (search for similar items in EconPapers)
Date: 2007
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DOI: 10.1057/9780230801493_4

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