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The Influence of Central Bank Transparency on Labor Market Regulation
Author(s) -
Hefeker Carsten,
Neugart Michael
Publication year - 2014
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2012.02334.x
Subject(s) - transparency (behavior) , economics , central bank , incentive , monetary policy , monetary economics , forward guidance , macroeconomics , inflation targeting , microeconomics , credit channel , political science , law
The paper develops a theory about the relation between monetary uncertainty and government incentives to implement reforms to reduce structural distortions in labor markets. We show that uncertainty about the central bank's behavior leads to more reforms. Empirical tests employing recently developed measures of central bank transparency around the world support our main propositions.