importantly, the additional fiscal conditionality can enhance the credibility of the central bank to achieve price stability. We … emphasize how the level and structure of government debt emerge as key factors affecting the credibility of monetary policy with …

credibility. Vestin (2006) shows that when the monetary authority cannot commit to future policy, price-level targeting yields … higher welfare than inflation targeting. We revisit this issue by introducing imperfect credibility, which is modeled as … targeting, if any, are small. -- Credibility ; Monetary policy framework …

credibility. Vestin (2006) shows that when the monetary authority cannot commit to future policy, price-level targeting yields … higher welfare than inflation targeting. We revisit this issue by introducing imperfect credibility, which is modeled as … targeting are small. A welfare loss occurs, if imperfect credibility is highly persistent. -- Credibility ; Monetary policy …