Modern theory has delivered both the conservative central banker and the principal-agent approaches as rationales for … shows not only that greater independence is associated with lower inflation, but also that the central bank's rights not to … finance the government and to set interest rates independently increase its effectiveness. The role of inflation targeting and …

heterogeneous inflation expectations. Expectations are updated through social dynamics and, with heterogeneity, not all firms choose … to operate, putting downward pressure on realized inflation. Our model rationalizes why countries stuck at the zero lower … bound have had a hard time increasing inflation without being aggressive. The same model also predicts that announcing an …

(GFC) of 2007-2008. It was greatly aided by the adoption of inflation targeting. In this paper we evaluate this convergence …

. Specifically, we estimate a series of simple models to measure the impact of inflation targeting on the dispersion of private … sector forecasts of inflation. Using a panel data set that includes 15 countries over 20 years we find no convincing evidence … that adopting an inflation targeting regime leads to a reduction in the dispersion of private sector forecasts of inflation …

-market economies. The chapter discusses the history, macroeconomic effects, theory, practice, and future of inflation targeting …Inflation targeting is a monetary-policy strategy that is characterized by an announced numerical inflation target, an … implementation of monetary policy that gives a major role to an inflation forecast and has been called forecast targeting, and a high …

We study how changes in the value of the steady-state real interest rate affect the optimal inflation target, both in …-for-one: increases in the optimal inflation rate are generally lower than declines in the steady-state real interest rate. Our approach … allows us not only to assess the uncertainty surrounding the optimal inflation target, but also to determine the latter while …

to solve these problems, we propose modifying the central bank's objective to (i) include state-contingent inflation … targets, (ii) target a measure of inflation that overweights non-tradable inflation …

-rate targeting, 2) monetary targeting, 3) inflation targeting, and 4) monetary policy with an implicit but not an explicit nominal …

determine inflation in this regime, so I base the analysis on the fiscal theory of the price level. I find that monetary policy … can peg the nominal rate, and determine expected inflation. With sticky prices, monetary policy can also affect real … interest rates and output, though higher interest rates raise output and then inflation. The conventional sign requires a …