interpreted, first and foremost, as a commitment device. In our setting, a monetary target helps anchoring inflation and inflation … well as a strong response to deviations of inflation from target and to the activity growth gap. In contrast, the response …

interpreted, first and foremost, as a commitment device. In our setting, a monetary target helps anchoring inflation and inflation … well as a strong response to deviations of inflation from target and to the activity growth gap. In contrast, the response …

to be important for optimal policy, that the optimal long-run inflation target is unaffected by the degree of potential …

to be important for optimal policy, that the optimal long-run inflation target is unaffected by the degree of potential …

disinflation under inflation targeting policies. The analysis is motivated by the disinflation performance of many inflation … episode price-setting firms' expect inflation to be highly persistent and opt for backward-looking indexation. As the central … bank acts to bring inflation under control, price-setting firms revise their estimates of the degree of persistence. Such …