plays a role, they have an incentive to lie. This paper studies the way inflation targeting affects the incentives the … central bank faces in announcing its target inflation rate when the central bank has private information about the state of … the economy and the public is uncertain about the central bank's preferences. While inflation targeting in the absence of …

plays a role, they have an incentive to lie. This paper studies the way inflation targeting affects the incentives the … central bank faces in announcing its target inflation rate when the central bank has private information about the state of … the economy and the public is uncertain about the central bank's preferences. While inflation targeting in the absence of …

function places weight (value) on the cost of the contract, then the optimal inflation contract does not completely neutralize … the inflation bias. Furthermore, the more concerned the government is about the cost of the contract or the less selfish … is the central banker, the smaller is the share of the inflation bias eliminated by the contract. Finally, a central …