, no conflict arises between flexible inflation targeting and maintaining/accumulating credibility. Second, implicit …In his 2004 inflation targeting manifesto, Marvin Goodfriend described US monetary policy as implicit inflation … targeting and advocated explicit targeting. Summarizing the 1965-2000 US inflation experience, he highlighted the importance of …

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 …

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 …

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 …

price stability. The benefits of credibility (private inflation expectations coinciding with the inflation target) are … discussed. Credibility improves the tradeoff between inflation variability, output-gap variability and instrument variability … inflation (with base drift in the price level) and price-level stability (without such base drift) are compared, and a suitable …

The rise, fall, and stabilization of US inflation between 1969 and 2005 is consistent with a model of shifting policy … sector learning about policymaker type. Using model-implied inflation forecasting rules to extract state variables from the … inflation forecasts in the Survey of Professional Forecasters, we provide evidence that policy regimes without commitment …

In a discretionary regime the monetary authority can print more money and create more inflation than people expect. But …, although these inflation surprises can have some benefits, they cannot arise systematically in equilibrium when people … inflation shocks ex post, the equilibrium growth rates of money and prices turn out to be higher than otherwise. Therefore …

(GFC) of 2007-2008. It was greatly aided by the adoption of inflation targeting. In this paper we evaluate this convergence … credibility). We then use panel VARs based on both factor models and observed data to ascertain the impact of global shocks …, financial shocks, trade shocks and credibility shocks on the EMEs versus the AEs …

distortion, e.g., underutilization of capacity and real exchange rate misalignment. However, while under imperfect credibility … by imperfect credibility …

their role in influencing the credibility of the monetary authority. We focus on measures of inflation expectations, the …In this paper we provide empirical measures of central bank credibility and augment these with historical narratives … mean reversion properties of inflation, and indicators of exchange rate risk. In addition we place some emphasis on whether …