Uncertainty and Central Bank Transparency: A Non-Bayesian Approach

Daniel Laskar
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Daniel Laskar: PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: We use a non-Bayesian approach to uncertainty, where "ambiguity" is taken into account, in order to analyze the issue of central bank transparency, and we underline that the use of such an approach may greatly change the results. We reconsider a specific argument against transparency found in the literature. We show that, in the presence of ambiguity, the argument can become a case in favor of transparency, which seems more in accordance with some stylized facts. Reduced Knightian uncertainty associated with increased transparency can contribute to making transparency beneficial.

Keywords: Central bank transparency; Knightian uncertainty; Ambiguity; Non-Bayesian approach; Political uncertainty (search for similar items in EconPapers)
Date: 2012-03
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Citations: View citations in EconPapers (1)

Published in Research in Economics, 2012, 66 (1), pp.82-96. ⟨10.1016/j.rie.2011.10.004⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00754598

DOI: 10.1016/j.rie.2011.10.004

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