generate losses which undermine macroeconomic stability and call into question the credibility of their policies. In assessing …

This paper presents a model for Inflation Targeting under imperfect policy credibility. It modifies the conventional … model in three ways: an endogenous policy credibility process, by which monetary policy can gain or lose credibility over … time; non-linearities in the inflation equation and in the credibility generating process; and an explicit loss function …

References to policy credibility, particularly with regard to fiscal policy, are ubiquitous in both economic literature …)-emerging markets joining a supranational entity that is generally considered to have higher policy credibility-provides a unique … experiment to assess the effects of credibility on sovereign credit. This paper examines the impact of EU accession on three key …

enhances credibility and mitigates concerns about the effect of expansionary fiscal policy on the cost of borrowing and debt …

The specific role of central bank independence in determining the overall credibility of monetary policy is addressed … in this paper. It is argued that the credibility of delegating monetary policy to an independent central bank is … endogenous to the credibility of the inflation target because a “conservative” inflation target may not be compatible with the …

This paper studies the question of how to achieve monetary policy credibility and price stability after a financial …

. 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 …