This paper outlines important lessons for monetary policy. In particular, the role of inflation targeting, which was … financial stability. Finally, this paper makes a case against increasing the central banks' inflation target. -- Inflation …

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 … policy-makers at the time. -- Inflation ; Price Stability ; Monetary Policy ; Monetary Targeting ; Policy Rules …