PurposeThe purpose of this paper is to study if the central bank (BC) communications affect the effectiveness of the monetary policy.Design/methodology/approachFor this analysis, a new Keynesian theoretical model and the ordinary least squared methodology were used. The objective to be achieved was to determine if there is some effect of economic transparency on accountability, inflation average, output gap, interest and central bank credibility.FindingsThe results highlighted that central banks with greater transparency contribute to decrease inflation rate and interest rate. The findings denote that an increase in the information quality (clarity) implies a significant change in the rate of readjustment of market expectations. Furthermore, central bank transparency contributes to anchor the public expectations and to affect long‐run interest rates.Research limitations/implicationsImpulse‐answer research was employed to show how the central bank transparency affects the credibility of monetary authorities.Practical implicationsThis paper suggests that the central bank publicizes its outlook, its policy monetary decisions, its expectations and its preferences.Originality/valueThe originality of the paper resides in the fact that empirical and theoretical studies were made in the single work. Also, new results were found denoting that economic transparency reduces uncertainty effect and increases the power of incentive contract made between the BC and public.
Este artigo analisou o crescimento da renda per capita municipal de Minas Gerais, entre 1991-2000, utilizando o modelo MRW (1992 com controle para condições de saúde e robusto contra efeitos espaciais. Os resultados indicaram que a renda converge entre 1,03% e 1,70% ao ano. Contudo, os modelos sem controles espaciais tendem a supervalorizar esse resultado. Somente o modelo com transbordamentos e regimes espaciais eliminou efetivamente a autocorrelação espacial, revelando a existência de clubes de convergência e um impacto de maior magnitude do capital físico em relação ao capital humano e à saúde. Ademais, verificouse um forte "efeito vizinhança" e uma relação positiva entre o estoque de capital físico e o impacto do capital humano sobre a renda.
Purpose This paper relates to the literature on central bank (CB) transparency and inflation uncertainty. Considering that opacity is a possible source for inflation uncertainty the purpose of this paper is to test the hypothesis that increase in the dispersion of the degree of CB opacity generates higher levels of inflation uncertainty. Design/methodology/approach In a first step, the authors present a theoretical model that shows how increase in the dispersion of the degree of CB opacity creates higher levels of inflation uncertainty. In a second step, the authors test the assumption that increase in the dispersion of the degree of CB opacity generates higher levels of inflation uncertainty in the Brazilian economy. Findings The findings denote that CB transparency is an important tool for guiding public expectations and thus contributes to avoiding the uncertainty caused by CB preferences. Originality/value This paper extends the theoretical model presented by de Mendonça and Simão Filho (2007) by the theoretical link between the forecast error and opacity. Furthermore, because the theoretical underpinning relies on the CB guiding inflation expectations, the authors construct an uncertainty measure based on survey of forecasts where such expectations can be inferred through the variability in the forecast error.
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