Skip to main content
SpringerLink
Log in

Transparency in monetary policy

  • Articles
  • Published:
Atlantic Economic Journal Aims and scope Submit manuscript

Abstract

The paper examines different aspects of transparency. Transparency serves democratic accountability by promoting public control. Specifically, the degree of transparency conditions inflation expectations, hence the central bank's scope for stabilization. Recent studies have put doubt on the notion that complete transparency is socially desirable. Here it is pointed out that the conclusion critically depends on an asymmetric modelling of stochastic preferences. The paper also reviews the pros and cons of revealing individual voting. A conclusion is that secrecy is to be prefered in monetary unions in order to shield governors from pressure by home governments.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Bank of England, Monetary Policy Committee: Various issues.

  • Barro, R. J.; Gordon, D. “A Positive Theory of Monetary Policy in a Natural Rate Model,”Journal of Political Economy, 91, 1983, pp. 589–610.

    Google Scholar 

  • Beetsma, R. M. W. J.; Jensen, H. “Inflation Targets and Contracts with Uncertain Central Banker Preferences,”Journal of Money, Credit and Banking, 30, 3.1, 1998, pp. 384–403.

    Google Scholar 

  • Bini Smaghi, L. “The Democratic Accountability of the European Central Bank,”Banca Nazionale del Lavoro Quarterly Review, 51, 1998, pp. 119–43.

    Google Scholar 

  • Blinder, A. S. “What Central Bankers Could Learn from Academics and Vice Versa,”Journal of Economic Perspectives, 11, 1997, pp. 3–20.

    Google Scholar 

  • Briault, C.; Haldane, A.; King, M. “Independence and Accountability,” in: I. Kuroda (ed.),Towards More Effective Monetary Policy, London: Macmillan, 1997, pp. 299–326.

    Google Scholar 

  • Brunner, K. “The Art of Central Banking, Centre for Research in Government Policy and Business,” Working Paper Gp B, 1981, pp. 81–6.

  • Buiter, W. H. “Alice in Euroland,”Journal of Common Market Studies, 37, 2, 1999, pp. 181–209.

    Google Scholar 

  • Cukierman, A.; Meltzer, A. “A Theory of Ambiguity, Credibility and Inflation under Discretion and Asymmetric Information,”Econometrica, 54, 1986, pp. 1099–128.

    Google Scholar 

  • Eijfinger, S. C. W.; Hoebrichts, M.; Schaling, E. “Why Money Talks and Wealth Whispers: Monetary Uncertainty and Mystique,”Journal of Money, Credit and Banking, 32, 2, 2000, pp. 218–35.

    Google Scholar 

  • Federal Reserve Bulletin: Various issues.

  • Faust, J.; Svensson, L. E. O. “Transparency and Credibility: Monetary Policy with Unobserved Goals,”International Economic Review, 42, 1999, pp. 369–97.

    Google Scholar 

  • ——. “The Equilibrium Degree of Transparency and Control in Monetary Policy,”Journal of Money, Credit and Banking, 34, 2002, pp. 520–39.

    Google Scholar 

  • Goodfriend, M. “Monetary Mystique: Secrecy and Central Banking,”Journal of Monetary Economics, 17, 1986, pp. 63–92.

    Article  Google Scholar 

  • Herrendorf, B.; Neumann, M. J. M. “The Political Economy of Inflation, Labour Market Distortions and Central Bank Independence,” CEPR Discussion Paper 1969, 1998.

  • --. “The Political Economy of Inflation, Labour Market Distortions and Central Bank Independence,”Economic Journal, 2002 (forthcoming).

  • Issing, O. “The Eurosystem: Transparent and Accountable or Willem in Euroland,”Journal of Common Market Studies, 37, 3, 1999, pp. 503–19.

    Google Scholar 

  • Lohmann, S. “Optimal Commitment in Monetary Policy: Credibility versus Flexibility,”American Economic Review, 82, 1992, pp. 273–86.

    Google Scholar 

  • Mihov, I.; Sibert, A. “Credibility and Flexibility with Monetary Policy Committees,” mimeo, London, 2002.

  • Sørensen, J. R. “Political Uncertainty and Macroeconomic Performance,”Economic Letters, 37, 1991, pp. 377–81.

    Google Scholar 

  • Stuart, A.; Ord, J. K.Kendall's Advanced Theory of Statistics, Vol. 2, 5th ed., London: Eduard Arnold, 1991.

    Google Scholar 

  • Waller, C. J. “Monetary Policy Games and Central Bank Politics,”Journal of Money, Credit and Banking, 21, 4, 1989, pp. 422–31.

    Google Scholar 

  • Winkler, B. “Which Kind of Transparency? On the Need for Clarity in Monetary Policy-Making,” European Central Bank Working Paper 26, 2000.

Download references

Author information

Authors and Affiliations

  1. Universitat Bonn, Germany

    Manfred J. M. Neumann

Authors
  1. Manfred J. M. Neumann
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Neumann, M.J.M. Transparency in monetary policy. Atlantic Economic Journal 30, 353–365 (2002). https://doi.org/10.1007/BF02298778

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF02298778

Keywords

Search

Navigation