The unemployment effect of central bank transparency

Christoph Weber

Empirical Economics, 2020, vol. 59, issue 6, No 14, 2947-2975

Abstract: Abstract Most central banks have increased their transparency in the recent past. The question is whether higher transparency comes at some cost. Firstly, the article shows in a theoretical model that transparency does not necessarily lead to higher unemployment. Secondly, the paper analyses the main theoretical results of other authors that transparency leads to higher wages and unemployment (volatility). The empirical results show no evidence for these conjectures. In fact, the analyses show that transparency can reduce the detrimental effect that central bank independence has on employment. Furthermore, the estimations confirm that transparency does not lead to higher unemployment volatility.

Keywords: Central bank transparency; Unemployment; Unemployment variability; Determinants of unemployment rates (search for similar items in EconPapers)
JEL-codes: E24 E42 E58 (search for similar items in EconPapers)
Date: 2020
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Working Paper: The Unemployment Effect of Central Bank Transparency (2017)
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DOI: 10.1007/s00181-019-01741-1

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