This paper presents a model for Inflation Targeting under imperfect policy credibility. It modifies the conventional … time; non-linearities in the inflation equation and in the credibility generating process; and an explicit loss function … model in three ways: an endogenous policy credibility process, by which monetary policy can gain or lose credibility over …

Central bank credibility plays a pivotal role in much of the modern literature on monetary policy, yet it is difficult … important issues: why credibility matters, and how credibility can be built. The central bankers' answers are compared with the …

whether changes in the interest rate are due to changes in the expected inflation rate or the real interest rate … of the Fed's Friday money supply announcements to test the theory. We find that an unexpectedly large money announcement …

knowledge contribute to better anchoring of consumers’ inflation expectations three years ahead around the ECB’s medium …-term inflation goal. Lastly, we show that consumers with higher inflation expectations are more likely to increase their household …

Inflation targeting offers the promise of introducing to monetary policy a logic and consistency that some central …, inflation targeting also serves two further objectives that are of more questionable import, and while seemingly contradictory … vocabulary pertaining solely to inflation, inflation targeting fosters over time the atrophication of concerns for real outcomes …