Effective Monetary Policy Conservatism: A Comparison of 13 OECD Countries

Berlemann, Michael; Hielscher, Kai

doi:10.1111/sjpe.12011

Cited by 5 publications

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References 50 publications

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“…Conservativeness means that the central bank puts a stronger emphasis on price stability than government and society. FollowingBerlemann and Hielscher (2013), CBI is necessary but not sufficient to solve the time-inconsistency problem.…”

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confidence: 99%

The unemployment effect of central bank transparency

Weber

2019

Empir Econ

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Most central banks around the world have increased their transparency in the recent past. The greater openness of central bankers manifests itself in the publication of the central banks' own macroeconomic forecasts or the disclosure of minutes and voting records of central bank committees. The intention of this policy is to build credibility and achieve better economic outcomes. The question is whether higher transparency comes at some cost, i.e. higher unemployment or higher unemployment variability. Firstly, the article shows in a theoretical model that opaqueness regarding the central bank's preferences does not necessarily lead to lower unemployment. Secondly, the paper analyses the main theoretical results of other authors, namely that transparency leads to higher wages, higher unemployment, and higher unemployment volatility. The results of the estimations show that there is no evidence that central bank transparency leads to higher wages. We can also reject the hypothesis that transparency induces higher unemployment. In fact, the analyses show that central bank transparency can reduce the detrimental effect that central bank independence has on employment. Furthermore, the estimations confirm that central bank transparency does not lead to higher unemployment volatility but can reduce it in most cases. JEL: E24, E42, E58

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confidence: 99%

The unemployment effect of central bank transparency

Weber

2019

Empir Econ

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Central bank transparency and inflation (volatility) – new evidence

Weber

2016

Int Econ Econ Policy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Abstract:The last decades have shown a tendency towards higher central bank transparency. It became customary for central bankers to explain their monetary policy decisions in detail and for them to publish inflation forecasts. This leads to the question of how central bank transparency is entangled with price stability and inflation volatility. A plethora of studies analysed the relationship from a theoretical point of view and came to contradictory results. Whilst some studies argued that transparency leads to lower inflation, others concluded that openness of central banks results in higher prices. Conversely, there is only a small amount of studies looking at this issue empirically. Most studies found a diminishing effect of transparency on inflation. However, these studies hardly controlled for other causes of inflation. This paper tries to close this gap by employing a panel data set on central bank transparency. We find that transparency significantly reduces inflation rates even if we control for other determinants of inflation. This result still holds under various robustness checks. The same is true for inflation volatility: central bank transparency seems to diminish inflation uncertainty. This confirms the economic importance of central bank transparency.JEL: E31, E42, E58

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Independence, conservatism, and beyond: Monetary policy, central bank governance and central banker preferences (1981–2021)

Masciandaro

2022

Journal of International Money and Finance

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Effective Monetary Policy Conservatism: A Comparison of 13 OECD Countries

Cited by 5 publications

References 50 publications

The unemployment effect of central bank transparency

The unemployment effect of central bank transparency

Central bank transparency and inflation (volatility) – new evidence

Independence, conservatism, and beyond: Monetary policy, central bank governance and central banker preferences (1981–2021)

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