Central Bank Transparency and Monetary Policy Effectiveness

The paper concentrates on the conditions, contingencies and determinants of central bank transparency and communication. From the state of the economy and the quality of national institutions, to the structure of monetary policy committees, the personality of the governor and the nature of the monetary policy framework - with a particular focus on the case of inflation targeting, there is a plethora of factors influencing the design and the conduct of a communication strategy. The debate remains open on whether we can speak about best practice or an optimal communication policy, but conflicting policy choices and outcomes seem to point to the fact that communication remains one of the greatest challenges for every central banker. The conclusion of the study is that there is no one-size-fits-all dogma for transparency. Cultural and national differences are paramount for choosing the best practice.