An Index for Transparency for Inflation-Targeting Central Banks: Application to the Czech National Bank

By Rania A. Al-Mashat, Ales Bulir, N. Nergiz Dinçer, Tibor Hlédik, Tomás Holub, Asya Kostanyan, Douglas Laxton, Armen Nurbekyan, Rafael A Portillo, Hou Wang

September 28, 2018

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Rania A. Al-Mashat, Ales Bulir, N. Nergiz Dinçer, Tibor Hlédik, Tomás Holub, Asya Kostanyan, Douglas Laxton, Armen Nurbekyan, Rafael A Portillo, and Hou Wang. An Index for Transparency for Inflation-Targeting Central Banks: Application to the Czech National Bank, (USA: International Monetary Fund, 2018) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper develops a new central bank transparency index for inflation-targeting central banks (CBT-IT index). It applies the CBT-IT index to the Czech National Bank (CNB), one of the most transparent inflation-targeting central banks. The CNB has invested heavily in developing a Forecasting and Policy Analysis System (FPAS) to implement a full-fledged inflation-forecast-targeting (IFT) regime. The components of CBT-IT index include measures of transparency about monetary policy objectives, the FPAS designed to support IFT, and the monetary policymaking process. For the CNB, all three components have shown substantial improvements over time but a few gaps remain. The CNB is currently working on eliminating some of these gaps.

Subject: Central bank policy rate, Central bank transparency, Central banks, Economic sectors, Financial crises, Financial sector policy and analysis, Financial sector stability, Financial services, Inflation, Inflation targeting, Monetary policy, Prices

Keywords: CBT-IT index, Central bank policy rate, Central bank transparency, Central banks, Financial sector stability, Global, IFT central bank, Inflation, Inflation targeting, Monetary policy, Policy message, Reaction function, Transmission mechanism, Transparency, Transparency index

Publication Details

Pages:

71
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/210
Stock No:

WPIEA2018210
ISBN:

9781484374832
ISSN:

1018-5941

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