effect of monetary policy? We consider a version of the Barro–Gordon credibility problem in which monetary policy signals an … inflation-biased CB's private information on both these dimensions. We find that greater CB competence—more private information …. Inflation expectations become more responsive to monetary policy, which mitigates the CB's temptation to produce surprise …

expansion) by focusing on domestic inflation, the foreign exchange (FX) rate, and the quantity of FX traded in the local market …. The empirical results suggest that the inflation rate is largely driven by foreign price and oil shocks. Nevertheless, the … the exchange rate, and slightly increasing the inflation rate. The latter finding has important implications for the …