| Author: | Jensen, H. |
| Title: | Optimal degrees of transparency in monetary policymaking |
| Journal: | Scandinavian Journal of Economics
2002 : SEP, VOL. 104:3, p. 399-422 |
| Index terms: | Monetary policy Central banks Inflation Theories Models |
| Language: | eng |
| Abstract: | According to most academics and policymakers, transparency in monetary policymaking is desirable. This proposition is examined in a small theoretical model emphasizing forward-looking private sector behaviour. Transparency makes it easier for price setters to infer the central bank's future policy intentions, thereby making current inflation more responsive to policy actions. This induces the central bank to pay more attention to inflation rather than output gap stabilization. Then, transparency may be disadvantageous. |
SCIMA