This paper presents a model for Inflation Targeting under imperfect policy credibility. It modifies the conventional … time; non-linearities in the inflation equation and in the credibility generating process; and an explicit loss function …. The model highlights problems associated with the practice of setting a series of rigid near-term inflation targets. Also …

This is the third chapter of a forthcoming monograph entitled On Implementing Full-Fledged Inflation-Targeting Regimes …: Saying What You Do and Doing What You Say. It examines a number of elements in the design of an inflation-targeting framework …. These include the definition of the target variable, the relevance of core measures of inflation, and the advantages and …