; and the adoption of a price-level target. We consider two assumptions about expectations formation. One assumption is … fully model-consistent expectations (MCE) - a reasonable assumption when a policy has been in place for some time, but …, and that other agents form their expectations using a small-scale VAR model estimated using historical data. All of the …

inflation) do not breach particular ‘thresholds'. In common with other similar policies, threshold-based forward guidance (TBFG …

This paper analyzes how the formation of expectations constrains monetary and fiscal policy design. Economic agents … the policy regime using historical data. Regime uncertainty substantially narrows, relative to a rational expectations … analysis of the model, the menu of policies consistent with expectations stabilization. When agents are learning about the …

We evaluate and compare alternative monetary policy rules, namely average inflation targeting, price level targeting …, and traditional inflation targeting rules, in a standard New Keynesian model that features recurring, transient zero lower … promotes determinacy and E-stability among the policy frameworks, whereas standard inflation targeting rules are prone to …