On the Negative Social Value of Central Banks' Knowledge Transparency

Abstract

We examine to what extent central banks should release their internal assessments concerning the links between money growth and future inflation, and between employment and inflation. We show that the social value of transparency concerning real shocks is negative since the disclosure of the central bank's private information eliminates the possibility of insuring the public against those shocks. Finally, we discuss a number of further arguments which have to be taken into account before policy conclusions can be drawn.

Note: Previously titled: On the Negative Social Value of Central Banks' Transparency

Keywords: Central banks, transparency, credibility, disclosure rules.

JEL Classification: E5, E52, E58