Aizenman, Joshua; Glick, Reuven - 2007
achieve inflation stability, but multiple equilibria are possible. We show that there are ex ante large gains from choosing a … more conservative not only in order to mitigate the inflation bias from the well-known time inconsistency problem, but also … to steer the economy away from the high inflation equilibria. These gains, however, come at a cost in the form of the …
