Central Bank Transparency and Monetary Policy Effectiveness مقاله

"Although it is difficult to separate the informational content from meta-information (and indeed many cases discussed here inescapably take into account the role of information), it is important to distinguish between policy announcements that have an impact due to their very informational content (such as inflation statistics) and statements that transmit to the public the subjective interpretation of the monetary reality from the central bank�s perspective. Beyond the linguistic approach, there is a whole range of studies that find evidence that central bank communications and transparency manage to affect inflation expectations: Kuttner and Posen, (1999), Kohn and Sack, (2003), Orphanides and Williams, (2004), Reeves and Sawicky, (2005), Cruijsen and Demertzis (2005), Gürkaynak, Levin and Swanson, (2006), 1. Figure 1: Impact of FOMC statements on interest rates (Woodford, 2005) / Figure 2: ECB’s discourse and policy stance / Apart from proper monetary policy communications for anchoring inflation expectations, a typical area for central bank oral interventions is the exchange rate policy. As the monetary policy acts directly only on short term interest rates, the transmission mechanism towards the long end of the interest rate spectrum depends essentially on market expectations about future central bank decisions. Winkler (2000) has constructed a pyramid of a transparent monetary policy strategy in which he stresses the importance of simplified and condensed information in the communication strategy of a central bank to the different external target audiences. They suggest that there is an optimal level of central bank transparency beyond which communication risks become redundant and spoil the perceptions of the public vis-à-vis the implementation of the monetary policy."