of their specific occupational background. Third, party members react significantly less to inflation and more to output …

-)establish credibility, optimal monetary policy under discretion is shown to set higher interest rates today if average inflation exceeded … bankers to undertake larger interest rate steps (ceteris paribus). -- Inflation expectations ; credibility ; reaction function …In this paper we systematically evaluate how central banks respond to inflation deviations from target. We present a …

credibility. In our setting, central bank credibility is proportional to the deviation of inflation expectations from the … announced inflation target, with positive deviations being more costly compared to negative ones. A loss in policy credibility … as a result of shocks leads to a more persistent, backward-looking inflation process, and is associated with lower output …

In this paper we systematically evaluate how central banks respond to deviations from the inflation target. We present … a stylized New Keynesian model in which agents' inflation expectations are sensitive to deviations from the inflation … target. To (re-) establish credibility, monetary policy under discretion sets higher interest rates today if average …

quarters of their tenure in an effort to establish a reputation for being inflation averse. Second, we find a significantly … 1974–2008. We find, first, that newly appointed governors fight inflation more aggressively during the first four to eight … stronger reaction to inflation by newly appointed governors working within monetary policy frameworks comprised of an at least …

quarters of their tenure in an effort to establish a reputation for being inflation averse. Second, we find a significantly … partly independent central bank and an explicit nominal anchor. -- Central bank governors ; credibility ; inflation … 1974-2008. We find, first, that newly appointed governors fight inflation more aggressively during the first four to eight …

rate both matter for determining inflation and economic activity. …

by the announcement of inflation targeting in 1991 when estimating the effects of monetary policy. For instance, we find …