-)establish credibility, optimal monetary policy under discretion is shown to set higher interest rates today if average inflation exceeded … term in the central bank's optimal instrument rule, which we refer to as the "credibility loss". Augmenting a standard … of seven central banks and that this influence is economically meaningful. A deteroriation in credibility forces central …

target. To (re-) establish credibility, monetary policy under discretion sets higher interest rates today if average … reflected in an additional term in the central bank's instrument rule, which we refer to as the "credibility loss." Augmenting a … and that this influence is economically meaningful. Deterioration in credibility (ceteris paribus) forces central bankers …

-)establish credibility, optimal monetary policy under discretion is shown to set higher interest rates today if average inflation exceeded … term in the central bank's optimal instrument rule, which we refer to as the credibility loss. Augmenting a standard Taylor … seven central banks and that this influence is economically meaningful. A deteroriation in credibility forces central …

target. To (re-) establish credibility, monetary policy under discretion sets higher interest rates today if average … reflected in an additional term in the central bank's instrument rule, which we refer to as the "credibility loss." Augmenting a … and that this influence is economically meaningful. Deterioration in credibility (ceteris paribus) forces central bankers …

extent to which inflation expectations are formed by the announced targets. As the credibility of the central bank increases … target. Credibility enables expectation to be formed in a forward-looking way by weakening its connection with the past. This … study aims to contribute to the literature concerning the effects of credibility on monetary policy. For this purpose, using …

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 …