Neuenkirch, Matthias; Tillmann, Peter - In: Journal of International Money and Finance 41 (2014) C, pp. 30-45
In this paper we systematically evaluate how central banks respond to deviations from the inflation target. We present a stylized New Keynesian model in which agents' inflation expectations are sensitive to deviations from the inflation target. To (re-) establish credibility, monetary policy...
