Central bank’s conservativeness and transparency

In a setting with a risk-adverse union, we study the effects of central bank’s political transparency on wage level and inflation volatility according to its degree of conservativeness. We obtain some results that contrast with these obtained in the same kind of model or in a Rogoff type model of a conservative central banker. For high (low) degree of conservativeness, more transparency may lead to more (less) wage discipline. When the degree of conservativeness is high, inflation volatility decreases with transparency, independently of the initial degree of transparency. In the contrary, inflation volatility could increase or decrease with transparency.