Bonomo, Marco Antonio (contributor); … - 2008
paper, we examine how credibility affects the outcome of a disinflation in a model with endogenous time-dependent pricing … play an important role in explaining the effects of imperfect credibility. We initially consider the costs of disinflation … when the degree of credibility is fixed, and then allow agents to use Bayes’ rule to update beliefs about the “type” of …