out to be only a slowdown, and inflation never departed from levels consistent with the ECB's quantitative definition of …

is derived from policy-makers' preferences about inflation outcomes, we first show that downside risks to price stability … bias in the risk balance throughout our evaluation period because of the implied amplification of deflation risks. We then … future inflation can provide insurance against the materialization of such upside risks …

credibility a pegged exchange rate regime yields a lower loss compared to an inflation targeting policy, even if this policy … for a policy-maker to adopt inflation targeting over a strict exchange rate targeting regime. Full credibility is not a … precondition, but exposure to foreign and financial shocks and high steady state inflation make joining the EMU relatively more …

This paper first shows that the forecast error incurred when assuming that future inflation will be equal to the … inflation target announced by the central bank is typically at least as small and often smaller than forecast errors of model …-based and published inflation forecasts. It then shows that there are substantial benefits in having rule-of-thumb agents who …

announcing a quantified inflation objective, other forms of communication, or by publishing central banks’ inflation and output … (economic) transparency, and given our findings that disagreement among inflation expectations in the general public is not …

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 …

increased, we find that, as of September 2002, with the exception of Japan there is no evidence of substantial deflation risks …. We also put the estimates of deflation risk for the United States, Germany and Japan into historical perspective. We find … that only for Japan there is evidence of deflation risks that are unusually high by historical standards. …

reaching favourable macroeconomic outcomes (i.e. recovering pandemic output losses and bringing inflation close to the ECB …