Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152475
Authors: 
Geraats, Petra M.
Year of Publication: 
2001
Series/Report no.: 
ECB Working Paper 41
Abstract: 
Recently, several central banks have abandoned the usual secrecy in monetary policy and become very transparent. This paper provides an explanation for this puzzling fact, focussing on the disclosure of central bank forecasts. It shows that transparency reduces the inflationary bias and gives the central bank greater flexibility to respond to shocks in the economy. Furthermore, it makes it easier for a central bank to build reputation. To achieve these benefits of transparency it is generally necessary to publish the conditional central bank forecasts for both inflation and output.
JEL: 
E52
E58
Document Type: 
Working Paper

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