Westelius, Niklas J.; Mishkin, Frederic S. - Department of Economics, Hunter College - 2006
In this paper we examine how target ranges work in the context of a Barro-Gordon (1983) type model, in which the time-inconsistency problem stems from political pressures from the government. We show that target ranges turn out to be an excellent way to cope with the time-inconsistency problem,...
