rational expectations, and study the role that a central bank, implementing an inflation targeting regime via a monetary policy … results point to the prime importance of the credibility of central bank's inflation target regarding macroeconomic … stabilisation, as well as the beneficial role played by that target as an anchoring device for private inflation expectations. We …

Expectations play a major role in macroeconomic dynamics, especially regarding the conduct of monetary policy. Yet …, modeling the interplay between communication, expectations and aggregate outcomes remains a challenging task, mainly because … this requires deviation from the paradigm of rational expectations and perfect information. While agent-based macro models …

credibility") versus discretionary policy where the Fed reneges on its commitment at all periods with a probability equal to one … ("zero credibility"). The transmission mechanism is the new-Keynesian Phillips curve with auto-correlated cost-push shock. It … includes the labor cost channel or the working capital channel. Discretion with zero credibility of the Fed is rejected. The …

Previous literature has shown that, in a New Keynesian model, an expectations based policy rule induces E-stability of …