solutions such as the conservative central banker and optimal inflation contracts. Our theoretical model also shows how an … inflation targeting range should be set and how it should respond to changes in the nature of shocks to the economy …

Modern theory has delivered both the conservative central banker and the principal-agent approaches as rationales for … shows not only that greater independence is associated with lower inflation, but also that the central bank's rights not to … finance the government and to set interest rates independently increase its effectiveness. The role of inflation targeting and …

inflation target. The first two strategies restore the Taylor principle as a sufficient condition for stabilizing expectations …. In contrast, in economies with persistent shocks, communicating the inflation target fails to protect against … policy strategy: announcing an inflation target is not enough to stabilize expectations -- one must also announce how this …

focusing inflation targeting that is implemented by a Taylor type rule, a rule that in equilibrium is reflected in the exchange … monetary can't deliver a stationary domestic price level. Another feature in the data for inflation targeting countries that is … direction from PPP in response to an 'inflation' shock - the 'bad news god news' result of Clarida -Waldman (2008;2014). This is …

central banks to control inflation within their borders, at least in the absence of coordination of policy with other central … the ability of monetary policy to control inflation: by making liquidity premia a function of quot;global liquidityquot … central banks to control the dynamics of inflation …

Should central banks, because of the zero-lower-bound problem, raise their inflation-rate targets? Several arguments … are relevant. (1) In the absence of the ZLB, the optimal steady-state inflation rate, according to standard New Keynesian … currency is feasible (even arguably attractive) and would remove the ZLB constraint on policy. (5) Increasing target inflation …

This paper assumes that a central bank commits itself to maintaining an inflation target and then asks what measure of … the inflation rate the central bank should use if it wants to maximize economic stability. The paper first formalizes this …

In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating … stabilize price movements in the flexible price sector. Also, in the presence of financial frictions, stabilizing core inflation … frictions a welfare-maximizing central bank should adopt flexible headline inflation targeting--a target based on headline …