Central Bank Transparency and Price Stability

The thesis investigates the central bank transparency employing the Monetary Policy Transparency Index. The main objective is to investigate recent trends in the central bank transparency. First, the level of monetary policy transparency is investigated from various aspects, as, for instance, time or geographical aspect. In the next part, all the data are averaged and linear regression analysis is carried out to detect the determinants of the monetary policy which explain the variation among the individual central banks. Finally, panel regressions are conducted to explore the time variation in the monetary policy transparency in the countries. Throughout the text, all the results are compared with the results presented in the paper by Dincer & Eichengreen (2009). The data show that the overall time trend in the level of monetary transparency is increasing. It can be concluded that inflation targeters are generally more transparent than countries with other frameworks. The same applies to advanced countries and emerging and developing countries. The de facto exchange rate regime and all political variables used significantly determine the variation in the monetary policy transparency comparing individual countries. GDP per capita and financial depth significantly influence the time variation in the..