Does Central Bank Transparency Matter for Inflation: Role of Inflation Targeting
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Published:2024-09-15
Issue:3
Volume:39
Page:646-670
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ISSN:1225-651X
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Container-title:The Journal of Economic Integration
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language:en
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Short-container-title:The Journal of Economic Integration
Author:
Sethi Dinabandhu,Acharya Debashis,Sharma Ujjwal
Abstract
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.
Publisher
Center for Economic Integration