Iris Biefang Frisancho Mariscal
Monetary policy transparency in the UK: The impact of independence and inflation targeting
Mariscal, Iris Biefang Frisancho; Biefang-Frisancho Mariscal, Iris; Howells, Peter
Authors
Iris Biefang-Frisancho Mariscal
Peter Howells
Abstract
There is a widespread belief that the transparency of UK monetary policy has increased substantially as a result of the introduction of inflation targeting in 1992 and a number of procedural and institutional reforms which accompanied and followed it. Here, money market responses (and other data) are used to test the possibility that improved anticipation of policy moves may be the result of developments other than the institutional reforms popularly cited. We find overwhelming evidence that the switch to inflation targeting itself significantly reduced monetary policy surprises, while subsequent reforms have contributed little. Where we advance substantially on earlier work is to look at the cross-sectional dispersion of agents' anticipation. If the benefit of transparency is the elimination of policy surprise, there is little benefit if the averagely correct anticipations of agents conceal a wide dispersion of view.
Citation
Mariscal, I. B. F., Biefang-Frisancho Mariscal, I., & Howells, P. (2007). Monetary policy transparency in the UK: The impact of independence and inflation targeting. International Review of Applied Economics, 21(5), 603-617. https://doi.org/10.1080/02692170701525966
Journal Article Type | Article |
---|---|
Publication Date | Dec 1, 2007 |
Deposit Date | Dec 16, 2010 |
Publicly Available Date | Nov 7, 2016 |
Journal | International Review of Applied Economics |
Print ISSN | 0269-2171 |
Electronic ISSN | 1465-3486 |
Publisher | Taylor & Francis (Routledge) |
Peer Reviewed | Peer Reviewed |
Volume | 21 |
Issue | 5 |
Pages | 603-617 |
DOI | https://doi.org/10.1080/02692170701525966 |
Keywords | monetary policy, central banks, inflation targeting |
Public URL | https://uwe-repository.worktribe.com/output/1031914 |
Publisher URL | http://dx.doi.org/10.1080/02692170701525966 |
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