Why Doesn't Society Minimize Central Bank Secrecy?

27 Pages Posted: 18 Apr 2011

See all articles by Karen K. Lewis

Karen K. Lewis

University of Pennsylvania - Finance Department; National Bureau of Economic Research (NBER)

Date Written: July 1990


Societies have incentives to design institutions that allow central bank secrecy. This paper illustrates these incentives in two ways. First, if society tries to constrain secrecy in one way, central bankers will try to regain lost effectiveness by building up secrecy in other ways. Therefore, we may wind up accepting types of secrecy that appear preventable because reducing them would lead to higher costs. Second, if the social trade-offs between policy objectives change over time, the public may directly prefer greater central bank secrecy so that it will be surprised with expansionary policies when it most desires them.

Suggested Citation

Lewis, Karen Kay, Why Doesn't Society Minimize Central Bank Secrecy? (July 1990). NBER Working Paper No. w3397, Available at SSRN: https://ssrn.com/abstract=1810317

Karen Kay Lewis (Contact Author)

University of Pennsylvania - Finance Department ( email )

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