increased, we find that, as of September 2002, with the exception of Japan there is no evidence of substantial deflation risks …. We also put the estimates of deflation risk for the United States, Germany and Japan into historical perspective. We find … that only for Japan there is evidence of deflation risks that are unusually high by historical standards. JEL …

interpreted, first and foremost, as a commitment device. In our setting, a monetary target helps anchoring inflation and inflation … well as a strong response to deviations of inflation from target and to the activity growth gap. In contrast, the response …

is derived from policy-makers’ preferences about inflation outcomes, we first show that downside risks to price stability … in the risk balance throughout our evaluation period because of the implied amplification of deflation risks. We then … future inflation can provide insurance against the materialisation of such upside risks. JEL Classification: E31, E37, E52, E …

monetary targets, the SNB was able to reduce the inflation trend to low levels. However, it was less successful in preserving …-emptive policy stance. At the end of 1999, the SNB abandoned monetary targeting in favour of an approach based on inflation forecasts …

This paper assumes that a central bank commits itself to maintaining an inflation target and then asks what measure of … the inflation rate the central bank should use if it wants to maximize economic stability. The paper first formalizes this …

announcing a quantified inflation objective, other forms of communication, or by publishing central banks’ inflation and output … (economic) transparency, and given our findings that disagreement among inflation expectations in the general public is not …

This paper first shows that the forecast error incurred when assuming that future inflation will be equal to the … inflation target announced by the central bank is typically at least as small and often smaller than forecast errors of model …-based and published inflation forecasts. It then shows that there are substantial benefits in having rule-of-thumb agents who …

credibility a pegged exchange rate regime yields a lower loss compared to an inflation targeting policy, even if this policy … for a policy-maker to adopt inflation targeting over a strict exchange rate targeting regime. Full credibility is not a … precondition, but exposure to foreign and financial shocks and high steady state inflation make joining the EMU relatively more …