| Does Central Bank Transparency Matter for Inflation: Role of Inflation Targeting |
Dinabandhu Sethi, 1 Debashis Acharya, 2 Ujjwal Sharma 1 |
1Department of Liberal Arts, Indian Institute of Technology Hyderabad, Telangana, India
2School of Economics, University of Hyderabad, Hyderabad, Telangana, India |
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Corresponding Author:
Dinabandhu Sethi ,Email: dinabandhu@la.iith.ac.in |
| Copyright ©2024 The Journal of Economic Integration |
| ABSTRACT |
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This paper examines the relationship between central bank transparency and inflation for six inflation targeting (IT) and ten non-inflation targeting (non-IT) Asian economies. The propensity score matching and panel regression model are employed in the study. The empirical analysis shows that IT enhances central bank transparency. Further, we find that central bank transparency in IT significantly lowers inflation, suggesting that countries promoting greater monetary policy transparency can have a better advantage of experiencing low inflation. Our findings have policy implications for central banks in developing economies that are grappling with low transparency.
JEL Classification
E52: Monetary Policy
E31: Price Level; Inflation; Deflation
E58: Central Banks and Their Policies
E61: Policy Objectives; Policy Designs and Consistency; Policy Coordination |
| Keywords:
monetary policy | inflation targeting | central bank transparency | inflation | panel data model
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