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Central bank’s conservativeness and transparency

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  • Meixing Dai

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

  • Moïse Sidiropoulos

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique, Aristotle University of Thessaloniki)

Abstract

In a setting with a risk-adverse union, we study the effects of central bank's political transparency on wage level and inflation volatility according to its degree of conservativeness. We obtain some results that contrast with these obtained in the same kind of model or in a Rogoff type model of a conservative central banker. For high (low) degree of conservativeness, more transparency may lead to more (less) wage discipline. When the degree of conservativeness is high, inflation volatility decreases with transparency, independently of the initial degree of transparency. In the contrary, inflation volatility could increase or decrease with transparency.

Suggested Citation

  • Meixing Dai & Moïse Sidiropoulos, 2008. "Central bank’s conservativeness and transparency," Post-Print hal-03692296, HAL.
    • Handle: RePEc:hal:journl:hal-03692296
    DOI: 10.1016/j.rie.2008.06.002
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    Cited by:

    1. Laskar, Daniel, 2012. "Uncertainty and central bank transparency: A non-Bayesian approach," Research in Economics, Elsevier, vol. 66(1), pages 82-96.
    2. repec:kap:iaecre:v:12:y:2006:i:3:p:287-297 is not listed on IDEAS
    3. James, Jonathan G. & Lawler, Phillip, 2010. "Union objectives and indexation externalities in a monopolistically competitive economy," Research in Economics, Elsevier, vol. 64(1), pages 28-35, March.
    4. Papadamou, Stephanos, 2013. "Market anticipation of monetary policy actions and interest rate transmission to US Treasury market rates," Economic Modelling, Elsevier, vol. 33(C), pages 545-551.
    5. Stephanos Papadamou & Vangelis Arvanitis, 2015. "The effect of the market-based monetary policy transparency index on inflation and output variability," International Review of Applied Economics, Taylor & Francis Journals, vol. 29(1), pages 105-124, January.
    6. Sánchez, Marcelo, 2011. "Monetary strictness and labour market outcomes under incomplete transparency," Research in Economics, Elsevier, vol. 65(2), pages 95-99, June.
    7. Peter Howells, 2009. "Independent Central Banks: Some theoretical and empirical problems?," Working Papers 0908, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    8. Amir Kia, 2011. "Developing a Market-Based Monetary Policy Transparency Index: Evidence from the United States," Economic Issues Journal Articles, Economic Issues, vol. 16(2), pages 53-80, September.

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