Transparency of the monetary policy in theoretical and empirical studies

Abstract

This paper aims to review the existing body of research, both theoretical and empirical, conducted in the last fifteen years on the transparency and communication policies of central banks. In the first section, selected definitions of the transparency of the a monetary policy proposed in leading academic papers on the topic are presented. Further sections present a set of instruments which can improve the communication policy. The last section presents the most important research conducted in the last decade or so in Poland and abroad with the main objective of determining the relationship between a transparent monetary policy and the development of prices and expectations of the financial market. Particular emphasis was placed on research aimed at comparing different economies in terms of transparency of their monetary policies using transparency indices specifically developed for this purpose.