Conventional wisdom says that commitment eliminates the inflationary bias of monetary policy. However, this paper shows … that the inflation bias can persist even when the central bank commits. A simple model is presented in which the central … bank precommits by setting the policy instrument, and the subsequent adjustment of inflation expectations is part of the …

Conventional wisdom says that commitment eliminates the inflationary bias of monetary policy. However, this paper shows … that the inflation bias can persist even when the central bank commits. A simple model is presented in which the central … bank precommits by setting the policy instrument, and the subsequent adjustment of inflation expectations is part of the …

Conventional wisdom says that commitment eliminates the inflationary bias of monetaryÜblicherweise wird angenommen …

price setters to infer the central bank's future policy intentions, thereby making current inflation more responsive to … policy actions. This induces the central bank to pay more attention to inflation rather than output gap stabilization. Then …, transparency may be disadvantageous. It may actually be a policy-distorting straitjacket if the central bank enjoys low-inflation …

price setters to infer the central bank's future policy intentions, thereby making current inflation more responsive to … policy actions. This induces the central bank to pay more attention to inflation rather than output gap stabilization. Then …, transparency may be disadvantageous. It may actually be a policy-distorting straitjacket if the central bank enjoys low-inflation …

price setters to infer the central bank's future policy intentions, thereby making current inflation more responsive to … policy actions. This induces the central bank to pay more attention to inflation rather than output gap stabilization. Then …, transparency may be disadvantageous. It may actually be a policy-distorting straitjacket if the central bank enjoys low-inflation …

policy emerges because the implied behavioral equation is identical with that under commitment to the social loss function …

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 … aspect of credibility--at least for long-term inflation expectations--may be public views about how future changes in …