followed the German hyper-inflation. Significant real dislocations arose after the monetary reform; and these can be attributed … to a government policy which subsidized heavy industry through the inflation tax proceeds. The "credibility problem …

reacting to them to ensure that inflation expectations remain anchored. In this paper, we propose a tractable framework to … of bounded rationality involving level-k thinking (LKT). Despite modelling LKT in a way that nests both adaptive and … inflation occurs through re-anchoring of expectations rather than economic slack. We also discuss risks and why policy errors in …

This paper provides an explanation for the run-up of U.S. inflation in the 1960s and 1970s and the sharp disinflation … by low inflation. However, prolonged episodes of high inflation ending with rapid disinflations can occur when … policymakers underestimate both the natural rate of unemployment and the persistence of inflation in the Phillips curve. I estimate …

A parsimonious model of shifting policy regimes can simultaneously capture expected and actual US inflation during 1969 …. Private sector learning about policymaker type leads to a reputation state variable. We use model inflation forecasting rules … to extract state variables from SPF inflation forecasts. US inflation is tracked by optimal policy without commitment …

Why do some attempts at disinflation lead to substantial reductions in inflation while others do not? We investigate … that a fundamental determinant of success in reducing inflation was the strength of the Federal Reserve's commitment to … disinflation at the start of its attempts. In episodes where its commitment was high, there were significant declines in inflation …

members also regarded long-term interest rates as key indicators of inflation expectations and of their disinflationary policy …

Inflation targeting offers the promise of introducing to monetary policy a logic and consistency that some central …, inflation targeting also serves two further objectives that are of more questionable import, and while seemingly contradictory … vocabulary pertaining solely to inflation, inflation targeting fosters over time the atrophication of concerns for real outcomes …

The paper gives a brief account of the Swedish experience of an inflation target in a floating exchange rate regime … insufficient transparency of and commitment to the current inflation- targeting policy …

A simple test of inflation target credibility is constructed by subtracting the maximum and minimum inflation rates … consistent with the inflation targets from the yields to maturity on nominal bonds. This results in a target-consistent range of … absolute credibility and credibility in expectation, are distinguished. The inflation targets of Canada, New Zealand and Sweden …

We develop and estimate a general equilibrium model in which monetary policy can deviate from active inflation …