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We inspect how inflation target announcements are instrumental in building central bank credibility and shaping … inflation expectations. Investigating the role of announcements by using a time varying credibility measure, we find that both …
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Central banks often make announcements even though, in models in which dynamic time inconsistency of optimal policy plays a role, they have an incentive to lie. This paper studies the way inflation targeting affects the incentives the central bank faces in announcing its target inflation rate...
Persistent link: https://www.econbiz.de/10014078808
Central banks often make announcements even though, in models in which dynamic time inconsistency of optimal policy plays a role, they have an incentive to lie. This paper studies the way inflation targeting affects the incentives the central bank faces in announcing its target inflation rate...
Persistent link: https://www.econbiz.de/10014118009
flexibility and credibility; similarly, New Zealand's improved inflation performance was achieved without a discernable increase …
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