This paper shows that the credibility gain from permanently committing to a fixed exchange rate by joining the European … credibility a pegged exchange rate regime yields a lower loss compared to an inflation targeting policy, even if this policy … ranking would be reversed in a fullcredibility environment. There exists an initial stock of credibility that must be achieved …

elements of the strategy can enhance the perceived credibility that price stability will be maintained in the medium … strongest positive impact on credibility, boosting credibility also among the less financially literate and generating more … persistent credibility gains, even after inflation increased …