MACROECONOMIC EFFECTS OF MONETARY POLICY TRANSPARENCY
Keywords:
transparency, monetary strategy, monetary policy, inflation targeting, inflation, financial stabilityAbstract
The examination of the central bank transparency is actually the examination of the effects of inflation targeting. It turned out that inflation targeting is the most transparent and effective monetary strategy, because it is focused on the final aim of monetary policy (price stability) and not at an operational instrument (money supply, liquidity, exchange rate, interest rate). The aim is realized with the combination of instruments, the most important of which is interest rate. The results of empirical studies have showed that the regime of inflation targeting and transparency of monetary policy lead to lower inflation rate, improvements in inflation prognosis, they reduce the duration of inflation, coefficient of sacrifice, fluctuation in production and exchange rate and contribute to financial stability.References
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