We study exchange rate and equity price dynamics, in general equilibrium, in the presence of news shocks about future … productivity and monetary policy. We identify a condition under which these asset prices become more volatile without affecting the … volatility of the underlying processes-a positive correlation between news and current shocks. This condition also explains why …

-looking specifications, especially when targeting core components of GDP and inflation, and combine the best parts of efficiency and …

-side flexibility are indeed the main channel through which monetary policy lowers the volatility of inflation and, even more …

with the model show that the steady state welfare maximizing inflation rate may be positive, although the numerical results … are not robust. It is also shown, however, that increases in the inflation rate are never Pareto efficient because during …

these policy instruments. It commits to higher money supply in the future so that the private sector expects inflation …

, Uganda (both de jure money targeters), and Ghana (a de jure inflation targeter), and compare the de facto adherence to …