University of Tabriz Applied Theories of Economics 2423-6586 3 4 2017 01 20 The Impact of Monetary and Financial Freedom on Monetary Policy Transparency in Low, Middle and High Income Countries The Impact of Monetary and Financial Freedom on Monetary Policy Transparency in Low, Middle and High Income Countries 153 176 5805 FA Omid Sattari Ph.D. Candidate in Economics, Tarbiat Modares University Kazem Yavari Associate Professor of Economics , Tarbiat Modares University Hassan Heydari Assistant Professor of Economics, Tarbiat Modares University Mansour Etesami Assistant Professor of Economics, Tarbiat Modares University Journal Article 2016 10 12 Theoretically speaking, monetary policy transparency refers to the informational symmetry between the central bank and the private sector. High degree of transparency reduces uncertainty, improves the private-sector inference about central bank goals, and increases the effectiveness of monetary policy. This study analyzes the impact of financial and monetary freedom on monetary policy transparency. A set of 102 countries -categorized in low, middle and high income groups have been investigated for the period 1998-2010, since the monetary policy transparency data are not available from 2010 onwards. The panel cointegation test suggests that the long run relationship between variables exists. The empirical findings suggest that while GDP per capita and trade freedom have a positive effect on transparency, the impact of financial freedom on transparency varieties in different income groups. Furthermore the monetary freedom exerts significant positive effect merely on middle income countries. These results imply that the reaction of monetary policy transparency to financial and monetary freedom might be depended to different economic structures. Theoretically speaking, monetary policy transparency refers to the informational symmetry between the central bank and the private sector. High degree of transparency reduces uncertainty, improves the private-sector inference about central bank goals, and increases the effectiveness of monetary policy. This study analyzes the impact of financial and monetary freedom on monetary policy transparency. A set of 102 countries -categorized in low, middle and high income groups have been investigated for the period 1998-2010, since the monetary policy transparency data are not available from 2010 onwards. The panel cointegation test suggests that the long run relationship between variables exists. The empirical findings suggest that while GDP per capita and trade freedom have a positive effect on transparency, the impact of financial freedom on transparency varieties in different income groups. Furthermore the monetary freedom exerts significant positive effect merely on middle income countries. These results imply that the reaction of monetary policy transparency to financial and monetary freedom might be depended to different economic structures. https://ecoj.tabrizu.ac.ir/article_5805_82d6189eaf0d061f87769ea2d4c8f441.pdf