Chatelain, Jean-Bernard; Ralf, Kirsten - 2017
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 …