The effectiveness of forward guidance depends on the credibility of the central bank. This paper sheds light on the … credibility can boost consumption in recessions close to the degree of that provided by a commitment central bank …

Keynesian model with heterogeneous expectations. We explicitly focus on the "anchoring" of expectations that is modeled as the … prevent waves of pessimism and exclude near unit root dynamics, even when expectations are unanchored. However, as shocks … of expectations evolves endogenously, the anchoring of expectations at the time the bad shocks hit is crucial in …

.S. data shows significantly different responses in inflation and inflation expectations consistent with theory. …Time-variation in disagreement about inflation expectations is a stylized fact in surveys, but little is known on how … inflation and inflation expectations, whereas both decline when disagreement is low. Estimating a smooth-transition model on U …

This paper applies a yield curve model that separates expectations and volatility components of market yields on … subsequent actual riskless rates for periods up to three years.Variances between Fed Funds and expectations of future riskless … of alternative forecasts.Given this direct relationship with future inflation, expectations of future riskless rates may …

expectations at the target. However, the CB may lose its credibility whenever its announcements become decoupled from actual … heterogeneous expectations that may durably lose their anchorage to the central bank (CB)'s target and coordinate on particularly …

New Keynesian theory identifies a set of principles central to the design and implementation of monetary policy. These … principles rely on the ability of a central bank to manage expectations precisely, with policy prescriptions typically derived … whether central banks can influence expectations with as much control as previously thought. In this paper, we survey the …