Actual versus Perceived Central Bank Transparency: The Case of the European Central Bank

45 Pages Posted: 5 Jun 2008

See all articles by Sylvester C. W. Eijffinger

Sylvester C. W. Eijffinger

Tilburg University (CentER) - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Carin van der Cruijsen

De Nederlandsche Bank

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Abstract

Central banks have become more and more transparent about their monetary policy making process. In the central bank transparency literature the distinction between actual and perceived central bank transparency is often lacking. However, as perceptions are crucial for the actions of economic agents this distinction matters. A discrepancy between actual and perceived transparency may exist because of incomplete or incorrect transparency knowledge and other (psychological) factors. Even financial experts, the most important channel through which the central bank can influence the economy, might suffer from misaligned perceptions. We investigate the mismatch between actual and perceived transparency and its relevance by analyzing data of a Dutch household survey on the European Central Bank's transparency. To benefit from higher transparency perceptions the European Central Bank might feel tempted to stress its transparency strengths, but hide its transparency weaknesses.

Keywords: behavioural economics, CentERpanel, central bank transparency, perceptions, survey

JEL Classification: D80, E52, E58

Suggested Citation

Eijffinger, Sylvester C. W. and van der Cruijsen, Carin, Actual versus Perceived Central Bank Transparency: The Case of the European Central Bank. CEPR Discussion Paper No. DP6525. Available at SSRN: https://ssrn.com/abstract=1140052

Sylvester C. W. Eijffinger (Contact Author)

Tilburg University (CentER) - Department of Economics ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2411 (Phone)
+31 13 466 3042 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Carin van der Cruijsen

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

HOME PAGE: http://www.dnb.nl/en/onderzoek-2/onderzoekers/overzicht-persoonlijke-paginas/index.jsp

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