Central banks that lack credibility often tie their exchange rate to that of a more credible partner in order to … “import” credibility. We show in a small open economy model that a central bank that displays “limited credibility” can … credibility will peg their currency to that of a more credible partner. As the central bank's credibility improves it will place …

influence on inflation persistence by its credibility and responses in the face of inflationary shocks. In this study, we use a … regimes. Further, we show that credibility of the monetary regime significantly influences inflation persistence observed … under the regime, such that higher (lower) regime credibility leads to lower (higher) inflation persistence. Finally, we …

We use a representative online survey to investigate the inflation expectations of German consumers and the credibility … of the ECB's inflation target during the recent high inflation period. We find that credibility has trended downwards …

inflation inertia can emerge: the interaction between lack of credibility of government monetary policy announcements and the …. Lack of credibility is then shown to lead to output losses during a disinflation program. We demonstrate the effects of … during disinflation programs with and without price controls and the influence of credibility problems. We discuss nominal …

We define and study transparency, credibility, and reputation in a model where the central bank's characteristics are … unobservable to the private sector and are inferred from the policy outcome. A low-credibility bank optimally conducts a more … expansionary policy than a high-credibility bank, in the sense that it induces higher inflation, but a less expansionary policy in …