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Inflation targeting, credibility and non-linear Taylor rules
Neuenkirch, Matthias; Tillmann, Peter - 2012
-)establish credibility, optimal monetary policy under discretion is shown to set higher interest rates today if average inflation exceeded … term in the central bank's optimal instrument rule, which we refer to as the credibility loss. Augmenting a standard Taylor … seven central banks and that this influence is economically meaningful. A deteroriation in credibility forces central …
Persistent link: https://www.econbiz.de/10010294449
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Does monetary policy credibility help in anchoring inflation expectations? Evidence from six inflation targeting emerging economies
Güler, Aslı - In: Journal of Central Banking Theory and Practice 10 (2021) 1, pp. 93-111
extent to which inflation expectations are formed by the announced targets. As the credibility of the central bank increases … target. Credibility enables expectation to be formed in a forward-looking way by weakening its connection with the past. This … study aims to contribute to the literature concerning the effects of credibility on monetary policy. For this purpose, using …
Persistent link: https://www.econbiz.de/10014558525
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Forecasting the central bank’s inflation objective is a good rule of thumb
Diron, Marie; Mojon, Benoît - 2005
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...
Persistent link: https://www.econbiz.de/10011604610
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Monetary policy and inflationary shocks under imperfect credibility
Darracq Pariès, Matthieu; Moyen, Stéphane - 2009
imperfect credibility and weak anchoring of long-term expectations. Within a medium-scale DSGE model, we introduce through a … credibility could amount to 0.25 pp of output gap standard deviation. …
Persistent link: https://www.econbiz.de/10011605111
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What can probability forecasts tell us about inflation risks?
García, Juan Angel; Manzanares, Andrés - 2007
A crucial but often ignored element of inflation expectations is the amount of perceived inflation risk. This paper estimates the degree of uncertainty and asymmetry in the probability forecasts of the Survey of Professional Forecasters (SPF) using a new methodology. The main conclusion from our...
Persistent link: https://www.econbiz.de/10011604871
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Monetary target announcements, reputation and hysteresis
Grüner, Hans Peter - 1994
Two signaling games of monetary policy are considered: game one examines the effect of hysteresis on the labor market on the results of the repeated monetary policy game. Disciplinary effects of reputation disappear in presence of hysteresis. The second game compares weifare effects of monetary...
Persistent link: https://www.econbiz.de/10010397973
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Social Trust and Central-Bank Independence
Berggren, Niclas; Daunfeldt, Sven-Olof; Hellström, Jörgen - 2012
credibility (or lack-of-trust) problem for monetary policy. This indicates a possible and until now unexplored link between social …
Persistent link: https://www.econbiz.de/10010320270
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Uncertainty about perceived inflation target and monetary policy
Aoki, Kosuke; Kimura, Takeshi - 2007
We analyse the interaction between private agents? uncertainty about inflation target and the central bank's data uncertainty. In our model, private agents update their perceived inflation target and the central bank estimates unobservable economic shocks as well as the perceived inflation...
Persistent link: https://www.econbiz.de/10010295855
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Convergence and anchoring of yield curves in the euro area
Ehrmann, Michael; Fratzscher, Marcel; Gürkaynak, Refet S. - 2007
the credibility that financial markets attach to monetary policy in the euro area. …
Persistent link: https://www.econbiz.de/10011604863
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Imperfect knowledge, inflation expectations, and monetary policy
Orphanides, Athanasios; Williams, John C. - 2003
This paper investigates the role that imperfect knowledge about the structure of the economy plays in the formation of expectations, macroeconomic dynamics, and the efficient formulation of monetary policy. Economic agents rely on an adaptive learning technology to form expectations and to...
Persistent link: https://www.econbiz.de/10010298276