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Monetary Policy Committee Transparency: Measurement,Determinants, and Economic Effects

Bernd Hayo () and Ummad Mazhar ()

No 201140, MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: This paper studies monetary policy committee transparency (MPCT) based on a new index that measures central bankers’ educational and professional backgrounds as disclosed through central bank websites. Based on a novel cross-sectional data set covering 75 central banks, we investigate the determinants of MPCT as well as its economic consequences. We find that past inflation, quality of institutional setup, and extent of Internet use in a country are important determinants of MPCT. MPCT has a robust and significantly negative impact on inflation variability, even after controlling for important macroeconomic variables and institutional transparency, as well as instrumenting MPCT in various ways.

Keywords: Monetary Policy Committee; Transparency; Monetary Policy Transparency; Monetary Policy; Central Banks (search for similar items in EconPapers)
JEL-codes: D12 D83 E52 E58 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2011
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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https://www.uni-marburg.de/en/fb02/research-groups ... ers/40-2011_hayo.pdf First version, 2011 (application/pdf)

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Journal Article: Monetary Policy Committee Transparency: Measurement, Determinants, and Economic Effects (2014) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201140

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