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The monetary policy credibility channel and the amplification effects in a semi-structural model
Chansriniyom, Thitipat; Epstein, Natan; Nalban, Valeriu - 2020
credibility. In our setting, central bank credibility is proportional to the deviation of inflation expectations from the … announced inflation target, with positive deviations being more costly compared to negative ones. A loss in policy credibility …. We find that the extended model with credibility effects matches well the key macroeconomic data over specific past …
Persistent link: https://www.econbiz.de/10012391944
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Expectations' anchoring and inflation persistence
Bems, Rudolfs; Caselli, Francesca; Grigoli, Francesco; … - 2018
Understanding the sources of inflation persistence is crucial for monetary policy. This paper provides an empirical assessment of the influence of inflation expectations' anchoring on the persistence of inflation. We construct a novel index of inflation expectations' anchoring using survey-based...
Persistent link: https://www.econbiz.de/10011978669
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the Simplest Test of Target Zone Credibility
International Monetary Fund - 1990
Under the assumption of no arbitrage exchange rate target zone credibility is tested by whether domestic interest rates … absent a devaluation. Under the assumption of uncovered interest rate parity credibility is tested by whether expected future …
Persistent link: https://www.econbiz.de/10014395839
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Credibility and the Dynamics of Stabilization Policy : A Basic Framework
Calvo, Guillermo - 1990
credibility is more costly under predetermined exchange rates because the real effects are more pronounced …
Persistent link: https://www.econbiz.de/10014395850
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Exchange-Rate-Based Stabilization under Imperfect Credibility
Calvo, Guillermo - 1991
-prices model. Under full credibility, a reduction in the rate of devaluation results in an immediate and permanent reduction in the …
Persistent link: https://www.econbiz.de/10014396006
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On Credible Disinflation
Roldos, Jorge - 1993
We study the effects of a credible, gradual exchange rate based disinflation program in a two sector economy. After an initial real exchange rate depreciation, the reductions in the rate of devaluation reduce the monetary wedge generated by a cash in advance constraint, leading to a gradual...
Persistent link: https://www.econbiz.de/10014397855
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Credibility dynamics and disinflation plans
Kostadinov, Rumen; Roldán, Francisco - 2020
We study the optimal design of a disinflation plan by a planner who lacks commitment. Having announced a plan, the Central banker faces a tradeoff between surprise inflation and building reputation, defined as the private sector's belief that the Central bank is committed to the plan. Some plans...
Persistent link: https://www.econbiz.de/10012251953
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Inflation Targeting with NAIRU Uncertainty and Endogenous Policy Credibility
Isard, Peter - 2001
. Cases in which policy credibility is ignored or treated as exogenous are distinguished from cases in which credibility and … inflation expectations respond endogenuously policy credibility strengthens the case for forward-looking inflation forecast …
Persistent link: https://www.econbiz.de/10014403818
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Disinflation, external vulnerability, and fiscal intransigence : some unpleasant Mundellian arithmetic
Tanner, Evan - 2017
country's external position to further deteriorate. A dynamic analysis shows that if the central bank itself lacks credibility …
Persistent link: https://www.econbiz.de/10011704524
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Considerations in Reducing Inflation From Low to Lower Levels
Tokarick, Stephen - 1998
In recent years, many countries have successfully reduced their inflation rates to relatively low levels of 2 to 3 percent. The question then arises as to whether it would be desirable to move to even lower rates of inflation. The paper examines the benefits and costs of moving from low...
Persistent link: https://www.econbiz.de/10014403460