Arbeitspapier
Central bank transparency and financial market expectations: The case of emerging markets
In this paper, we study the influence of central bank transparency on the formation of money market expectations in emerging markets. The sample covers 25 countries for the period from January 1998 to December 2009. We find, first, that transparency reduces the bias (the difference between the money market rate and the weighted expected target rate over the contract period) in money market expectations. The effect is larger for non-inflation targeters, countries with low income, and countries with low financial depth. However, the biasreducing effect of transparency prevails only if inflation is relatively low. Second, three subcategories of the Eijffinger and Geraats (2006) lead to a smaller bias in expectations: operational, political, and economic transparency, with the effect being the largest for operational transparency. Finally, an intermediate level of transparency is found to have the most favourable influence on money market expectations. Neither complete secrecy nor complete transparency is optimal.
- Language
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Englisch
- Bibliographic citation
-
Series: MAGKS Joint Discussion Paper Series in Economics ; No. 36-2011
- Classification
-
Wirtschaft
Monetary Policy
Central Banks and Their Policies
- Subject
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central bank transparency
emerging markets
financial market expectations
interest rates
monetary policy
money market
Geldpolitik
Informationsverhalten
Staatliche Information
Wirkungsanalyse
Geldmarkt
Zins
Erwartungstheorie
Zins
Geldpolitik
Aufstrebende Märkte
Schwellenländer
- Event
-
Geistige Schöpfung
- (who)
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Neuenkirch, Matthias
- Event
-
Veröffentlichung
- (who)
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Philipps-University Marburg, Faculty of Business Administration and Economics
- (where)
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Marburg
- (when)
-
2011
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Neuenkirch, Matthias
- Philipps-University Marburg, Faculty of Business Administration and Economics
Time of origin
- 2011
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