an expenditure bias. The focus is on constraints implemented in actual economies: monetary policy targets, limits on the … desirable as they hinder the ability of governments to smooth distortions. Allowing for the effective use of inflation during …. More pre-commitment to government actions is ineffective in curbing inefficiently high public expenditure …

institutions. Such an arrangement is inferior to an optimal inflation targeting, or a Rogoff-style central banker, whose optimal …

The fiscal theory states that inflation adjusts so that the real value of government debt equals the present value of … fiscal theory to interpret historical episodes, including the rise and fall of inflation in the 1970s and 1980s, the long … pegs, the ends of hyperinflations, currency crashes, and the success of inflation targets. Going forward, fiscal theory …

public spending. Under commitment, optimal stabilization is obtained by combining an inflation target that is contingent on … which it occurs. With only a shock-contingent inflation target, the political shock is spread out over time through debt … decumulate debt over time, so that in the long run all targets (for inflation, output and public spending) are attained. A …

resilient to external shocks. Enhancing the credibility of the inflation target would provide the monetary authorities with more … institutionally constrains discretionary policy may facilitate this task. It would also help ensure that the strong public commitment …. Améliorer la crédibilité de l’objectif d’inflation donnerait aux autorités monétaires plus de latitude pour réagir aux chocs …

economies. The general findings for monetary policy are that, while it was costly to lower inflation (in terms of output and … inflation further from its already low level. While inflation was being lowered, in a number of cases central banks were also … evidence that these changes have helped in terms of better anchoring inflation expectations. At the same time there is no firm …

We explore the performances of inflation targeting (IT) adoption in terms of fiscal discipline (FD), while most …