commiting to keep interest rates low at the exit of the liquidity trap, to stabilize inflation today. 2. From debt … consolidated budget) monetary policy becomes subservient to fiscal policy, giving rise to more volatile inflation, output and … interest rates. Liquidity trap (LT) episodes are longer, however, the impact of interest rate policy commitments on inflation …

empirically whether target formulations matter for the anchoring of long-term inflation expectations. In a panel of 29 countries … quantitative definition of price stability. A point target is more sucessful in limiting upside risks to inflation, while a range … target allows for higher downside risk to the inflation outlook. Our results suggest that range targets and tolerance bands …