conventional wisdom regarding stabilization policies, optimal tax policies in our economy are procyclical. Relative to the non …

related to the credibility of the monetary regime in place, something we measure by the persistence of inflation …

degrees of credibility, in which commitment and discretion become special cases of what we call quasi commitment. The monetary … measure of the (lack of) credibility of the monetary policy authority, we investigate the welfare effect of a marginal … increase in credibility. Our main finding is that, in a simple model of the monetary transmission mechanism, most of the gains …