The Impact of Increasing Transparency in Monetary Policy on Inflation and Unemployment

The increasing transparency of central banks’ internal communication and decision-making methods has been a global trend in the past fifteen years. Especially since the financial crisis in 2008, the general public has demanded greater transparency from governments and major market participants. This paper examines how the increase in information about the conduct and expectations of central banks affects unemployment rates and price level changes, especially in the context of a society in which there is a significant union presence. It finds that greater transparency fails to improve welfare when public information is released in such a way that agents place too little weight on their own information and when there is an uncoordinated-wage-decision externality among unions