An Analysis on the Effect of Monetary Policy Transparency and its Practice in China

Since 1990s,improving transparency of monetary policy has become an important institutional choice for more and more countries in the world.A normal analysis is made on the effect of transparency of monetary policy by using Rogoff conservative central bank model,finding that when the public and the central bank all show a rational projection,improving target transparency and operational transparency of monetary policy can lower inflation and fluctuation of output,but will not influence the average value of inflation and output.In contrast to the assessment indictors of transparency of monetary policy in the developed countries,there is a huge difference in China.Therefore,China's central bank should take positive actions to make clear definition of transparency of monetary policy,improve transparency of monetary policy target and operation of monetary policy for enforcing construction of transparency of monetary policy.