Political pressures and monetary mystique

Arbeitspapier

Central bank independence and transparency have become best practice in monetary policy. This paper cautions that transparency about economic information may not be beneficial in the absence of central bank independence. The reason is that it reduces monetary uncertainty, which could make the government less inhibited to interfere with monetary policy. In fact, a central bank could use monetary mystique to obtain greater insulation from political pressures, even if the government faces no direct cost of overriding. As a result, economic secrecy could be beneficial and provide the central bank greater political independence.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1999

Classification and Topics

• Classification: Wirtschaft ; Central Banks and Their Policies ; Monetary Policy ; Asymmetric and Private Information; Mechanism Design
• Subject: Geldpolitik ; Staatliche Information ; Zentralbankautonomie ; Geheimhaltung ; Public Choice ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Geraats, Petra Maria
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/26044
• Last update: 10.03.2025, 11:44 AM CET