Löffler, Axel; Schnabl, Gunther; Schobert, Franziska - CESifo - 2010
surplus liquidity is less efficient, because absorbing liquidity raises the costs of monetary policy operations. By … stability. To contain domestic inflation these central banks absorb rather then provide liquidity in their regular monetary … policy operations. Based on an augmented Barro-Gordon framework we show that inflation targeting within an environment of …