Actual Versus Perceived Central Bank Transparency: The case of the European Central Bank

Sylvester Eijffinger and Carin Cruijsen

No 6525, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Central banks have become more and more transparent about their monetary policy making process. In the central bank transparency literature the distinction between actual and perceived central bank transparency is often lacking. However, as perceptions are crucial for the actions of economic agents this distinction matters. A discrepancy between actual and perceived transparency may exist because of incomplete or incorrect 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 transparency perceptions the European Central Bank might feel tempted to stress its transparency strengths, but hide its transparency weaknesses.

Keywords: Behavioural economics; Centerpanel; Central bank transparency; Perceptions; Survey (search for similar items in EconPapers)
JEL-codes: D80 E52 E58 (search for similar items in EconPapers)
Date: 2007-10
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Citations: View citations in EconPapers (5)

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