Furthermore, there are few papers explicitly discussing the optimal degree of it. This thesis seeks to shed light on this discussion by reviewing the literature on the topic and providing an analysis of the current degree of transparency and its effects.
I find that central banks have become more transparent in recent time, and it is important to note that the central banks of relatively small economies have played a pioneering role in the implementation of transparency measures. The empirical analysis suggests that transparency reduces the level of inflation and probably the volatility as well, but its effect on output volatility is less conclusive. Furthermore, the marginal gain of increased transparency is diminishing.
Supervisor: Nina Larsson Midthjell
Submitted Spring 2014.