The inability of central banks to attain their target inflation rates in recent years has raised questions about the … extent to which central banks can control the inflation process. This paper discusses the evolution of thought and evidence … since the 1960s on the determinants of inflation and the role that should be played by central banks. The paper highlights …

reputation of central banks. Thus, central banks should not try to bring inflation back to the targeted level of 2%. Rather, they …Inflation in advanced economies is low by historical standards but there is no threat of deflation. Slower economic … growth is caused by supply-side constraints rather than low inflation. Below-the-target inflation does not damage the …

Ramsey optimal policy models the persistence of inflation, output gap and federal funds rate without requiring two additional … parameters for inflation indexation and habit persistence. The number of reduced form parameters is larger with Ramsey optimal …

reputation of central banks. Thus, central banks should not try to bring inflation back to the targeted level of 2%. Rather, they …Inflation in advanced economies is low by historical standards but there is no threat of deflation. Slower economic … growth is caused by supply-side constraints rather than low inflation. Below-the-target inflation does not damage the …

policy shock and decrease their inflation expectations 12 months ahead by -0.25%. With no credibility, they interpret it as … an information effect and increase their inflation expectations by 0.57%. We also document three stylized facts …: noneffective inflation target tolerance intervals during periods of low credibility, a loss of credibility has a long …

inflation and output stabilisation mandates of the CBN. The study also finds that inclusion of more instruments in the CBN … therefore emphasises the difficulty of the CBN to effectively manage inflation and output stabilisation simultaneously, which …