Policy implications are derived for an inflation-targeting central bank, whose credibility is endogenous and depends on … occur, depending on the credibility of the central bank. Deflationary spirals can be prevented with a high inflation target …

Elevated inflation can threaten the credibility of central banks and increase the risk that inflation expectations do …-varying propagation of inflationary shocks that improves forecasting performance of inflation and wage growth. Central bank credibility is … endogenous in our model and depends on several notions of the learning mechanism. Weaker credibility and a higher risk of …