Central bank credibility is critical for the effectiveness of monetary policy. The measures of credibility that are … alternative measure that allows us to track the evolution of credibility in an inflationary environment. Credibility is defined as … decisions. We adopt a Bayesian set up to exploit this definition and document how credibility changes over time. Our measure …

There has been much talk in the popular press about the difficulty of attaining credibility in the bond markets for the … low-inflation policies that have been adopted by a number of central banks in recent years. This credibility problem is … particularly severe for those countries that have a history of high inflation. Gaining credibility is often viewed in the context …