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 …

In models with complete markets, targeting core inflation enables monetary policy to maximize welfare by replicating … stabilize price movements in the flexible price sector. Also, in the presence of financial frictions, stabilizing core inflation … frictions a welfare-maximizing central bank should adopt flexible headline inflation targeting--a target based on headline …

labor markets employment and output are decreasing and inflation is initially increasing and then decreasing in the degree … of central bank conservatism. A radical-populist central banker who cares not at all about inflation (alternatively, who …

solutions such as the conservative central banker and optimal inflation contracts. Our theoretical model also shows how an … inflation targeting range should be set and how it should respond to changes in the nature of shocks to the economy …

Japan suffered a very high inflation rate in 1973-74. The CPI inflation rate rose to near 30% in 1974, the highest rate …, the oil crisis is blamed for the 1973-74 high inflation. However, due to monetary policy decisions in 1972-73, the … inflation rate had already exceeded 10% before the onset of the oil crisis in October 1973. These decisions include the interest …

average rates of money creation (or inflation) and policy responsiveness to cyclical disturbances, it is entirely feasible for …

, which involves a commitment to higher future inflation. This commitment mechanism works even though, realistically, the …

. Deflation subsided by 2005. As soon as inflation appeared to stabilize near a rate of zero, the Bank of Japan rapidly reduced …

The perceptions of a central bank's inflation aversion may reflect institutional structure or, more dynamically, the … for persistent variation in market perceptions of central bank inflation aversion. The first years of the European Central … the ECB during its first six years of operation significantly evolved, with a belief in its inflation aversion increasing …