Modern theory has delivered both the conservative central banker and the principal-agent approaches as rationales for …

distortion, e.g., underutilization of capacity and real exchange rate misalignment. However, while under imperfect credibility … by imperfect credibility …

credibility of the central bank. In contrast, conducting monetary policy with a flexible inflation target rule is likely to …

We define and study transparency, credibility, and reputation in a model where the central bank's characteristics are … unobservable to the private sector and are inferred from the policy outcome. A low-credibility bank optimally conducts a more … inflationary policy than a high-credibility bank, in the sense that it induces higher inflation, but a less expansionary policy in …

credibility). We then use panel VARs based on both factor models and observed data to ascertain the impact of global shocks …, financial shocks, trade shocks and credibility shocks on the EMEs versus the AEs … credibility in EMEs was more fragile than was the case for the AEs in the face of the global shocks (from the US) than was the …

before 1981 and by optimal policy with commitment afterward. In theory and quantification, the interaction of private sector …