Monetary Policy Transparency in the Inflation Targeting Countries: The Czech Republic, Hungary and Poland
CASE Studies and Analyses Working Paper No. 281
32 Pages Posted: 14 Feb 2005
Date Written: June 2004
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
JEL Classification: E52, E58, P52
Suggested Citation: Suggested Citation