Price level targeting has been proposed as an alternative to inflation targeting that may confer benefits if a central bank sets policy under discretion, even if society's loss function is specified in terms of inflation (instead of price level) volatility. This paper demonstrates the...

In this paper, a simple model of information asymmetry is used to study central bank forecast publication. Central banks are assumed to choose between not publishing a forecast, publishing a forecast that conditions on current policy, publishing an unconditional forecast, or publishing both....

An inflation targeting central bank gains credibility as agents learn about the target over time. This is beneficial to the central bank because it brings the policy consistent with attaining the inflation target closer to that required to attain potential output. Optimal monetary policy entails...

We model inflation forecasts as monotonically diverging from an estimated long-run anchor point towards actual inflation as the forecast horizon shortens. Fitting the model with forecaster-level data for Japan, we find that the estimated anchors across forecasters have tended to rise in recent...

Recent macroeconomic experience has drawn attention to the importance of interdependence among countries through financial markets and institutions, independently of traditional trade linkages. This paper develops a model of the international transmission of shocks due to interdependent...