Monetary Policy Transparency in Inflation Targeting Countries: The Czech Republic, Hungary and Poland

32 Pages Posted: 30 Jul 2009  

Mariusz Jarmuzek

International Monetary Fund (IMF)

Lucjan T. Orlowski

Sacred Heart University - John F. Welch College of Business

Artur Radziwill

CASE - Center for Social and Economic Research

Date Written: June 2004

Abstract

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.

Keywords: monetary policy, institutional and behavioural transparency, direct inflation targeting, EU New Member States, European Monetary Union.

Suggested Citation

Jarmuzek, Mariusz and Orlowski, Lucjan T. and Radziwill, Artur, Monetary Policy Transparency in Inflation Targeting Countries: The Czech Republic, Hungary and Poland (June 2004). CASE Network Studies and Analyses No. 281. Available at SSRN: https://ssrn.com/abstract=1441163 or http://dx.doi.org/10.2139/ssrn.1441163

Mariusz Jarmuzek (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street N.W.
Washington, DC 20431
United States

Lucjan T. Orlowski

Sacred Heart University - John F. Welch College of Business ( email )

5151 Park Avenue
Fairfield, CT 06825
United States
203-371-7858 (Phone)

HOME PAGE: http://www.sacredheart.edu/ltorlowski.cfm

Artur Radziwill

CASE - Center for Social and Economic Research ( email )

Sienkiewicza 12
00-944 Warsaw
Poland

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