Several empirical studies have suggested that the Bundesbank has pursued inflation targets rather than monetary targets. These studies have been criticized because they do not adequately measure the deviation from target and because they use some short term interest rate as a measure of the...

The popular Calvo model with indexation (Christiano, Eichenbaum and Evans, 2005) and sticky information (Mankiw and Reis, 2002) model have guided much of the monetary policy discussion. The strength of these approaches is that they can explain the persistence of inflation. However, both of these...

The book considers issues relevant to the European Central Bank in refining and communicating its strategy. It offers a historical assessment of the Bundesbank's strategy of monetary targeting conducted from 1974 to 1998. In contrast to several other prominent studies it is argued that money...