Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/64078
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dc.contributor.authorWalsh, Carl E.en_US
dc.date.accessioned2010-11-17en_US
dc.date.accessioned2012-09-21T11:55:00Z-
dc.date.available2012-09-21T11:55:00Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/64078-
dc.description.abstractIn this paper, I revisit an old question in the analysis of monetary policy that was first studied by Rogoff (1985) - should central banks pursue objectives that differ systematically from social welfare? I investigate how the answer to this question is affected by the degree of transparency that characterizes monetary policy. When the policy regime is one of discretion and the central bank is opaque, changes in the policy instrument have informational effects that distort the central bank's incentives and generate policy biases. Directing the central bank to place more weight on inflation stabilization, i.e., to implement a less flexible inflation targeting policy, can offset this distortion and lead to lower social loss. In contrast, the objectives of a transparent central bank should coincide with those of society. However, outcomes under transparency may be dominated by those produced by an opaque and conservative (i.e., less flexible) central bank.en_US
dc.language.isoengen_US
dc.publisher|aSanta Cruz Inst. for International Economics |cSanta Cruz, Calif.en_US
dc.relation.ispartofseries|aWorking Papers, Santa Cruz Institute for International Economics |x10-17en_US
dc.subject.jelE52en_US
dc.subject.jelE58en_US
dc.subject.ddc330en_US
dc.subject.keywordtransparencyen_US
dc.subject.keywordmonetary policyen_US
dc.subject.keywordinflation targetingen_US
dc.titleTransparency, the opacity bias, and optimal flexible inflation targetingen_US
dc.typeWorking Paperen_US
dc.identifier.ppn640014518en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US

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