We study the implications of uncertainty for inflation targeting. We apply Brainard's static framework which assumes multiplicative uncertainty in the monetary transmission. Brainard's main result is that in the presence of uncertainty, monetary authorities become naturally more cautious. But...

The process by which central banks take decisions has evolved over the years, with a tendency towards independence and decisions taken by committees rather than individuals. Monetary policy committees can be set up formally in different ways, traditionally falling into one of two categories:...