We develop an informational theory of dictatorship. Dictators survive not because of their use of force or ideology but …

We define and study transparency, credibility, and reputation in a model where the central bank's characteristics are … unobservable to the private sector and are inferred from the policy outcome. A low-credibility bank optimally conducts a more … inflationary policy than a high-credibility bank, in the sense that it induces higher inflation, but a less expansionary policy in …

benevolent and has no credibility problems, dollarization causes a fall in welfare, which can be measured by the implied … seigniorage loss or using Mundellian optimal currency area criteria. However, outcomes are rather different if credibility is …