Monetary Policy Transparency in Inflation Targeting Countries: The Czech Republic, Hungary and Poland
International Monetary Fund (IMF)
Lucjan T. Orlowski
Sacred Heart University - John F. Welch College of Business
CASE - Center for Social and Economic Research
CASE Network Studies and Analyses No. 281
This paper quantifies transparency of monetary policy in the three EU New Member States that have adopted direct inflation targeting strategy. Two measures of transparency are applied. The institutional measure reflects the extent to which a central bank discloses information that is related to the policymaking process. The behavioural measure reflects the clarity among the financial market participants about the true course of monetary policy. The paper shows an ambiguous association between the two measures of transparency, which may be attributed to the active exchange rate management policy that undermines the actual transparency proxied by the behavioural measure.
Number of Pages in PDF File: 32
Keywords: monetary policy, institutional and behavioural transparency, direct inflation targeting, EU New Member States, European Monetary Union.
Date posted: July 30, 2009
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