persistence, is instrumental in generating inflation persistence. However, the combination of full forward-looking behaviour and … inflation, the output gap, the nominal interest rate, as well as the real exchange rate. …

have used for illustrative purposes, we pinned down the long-run inflation expectations and domestic and foreign potential …

In this paper we incorporate the term structure of interest rates into a standard inflation forecast targeting … analyse inflation forecast targeting in two environments. One in which the central bank has perfect knowledge, in the sense …

, in the sense that it understands and observes the process by which private sector inflation expectations are generated …; in the second, the central bank has to learn the private sector inflation forecasting rule. With imperfect knowledge … accommodates private sector inflation expectations) is no longer constant across the disinflation, but becomes state …