New Working Paper | Central Bank Transparency and the Persistence of ‘Very High’ Inflation
October 20, 2025
The post-pandemic resurgence of inflation has renewed attention on its persistence and the role of central banks in maintaining credibility. Conventional explanations emphasize fiscal discipline, exchange rate regimes, or inflation targeting. However, these factors do not fully explain why some countries return rapidly to price stability while others experience prolonged inflationary episodes. We argue that central bank transparency—the clarity of communication regarding objectives, policy decisions, and macroeconomic forecasts—is a key determinant of inflation persistence.
