Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7364937 | Journal of International Financial Markets, Institutions and Money | 2014 | 16 Pages |
Abstract
This paper addresses the issue of impacts of central banks' transparency on stock market volatility. Using a simple theoretical macroeconomic model, we analytically find a negative link between stock prices volatility and central bank transparency. By applying panel data analysis on a set of 40 countries from 1998 to 2005, sufficient evidence for this negative relationship is provided, using three different measures of stock market volatility. Therefore, moving towards monetary policy transparency is recommended as stock market volatility can be reduced considerably, implying significant benefits for financial stability.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Stephanos Papadamou, Moïse Sidiropoulos, Eleftherios Spyromitros,