We use a version of the Fuhrer-Moore model to study the effects of expectations and central bank credibility on the economy's dynamic transition path during a disinflation. Simulations are compared under four different specifications of the model that vary according to the way that expectations...

Inflation targeting (IT)--a policy framework that directly targets an explicit inflation goal has gained widespread attention recently as it has been adopted by several OECD countries. The paper examines the British inflation targeting experience since 1993 by focusing on the out-of- sample...