flexibility and credibility; similarly, New Zealand's improved inflation performance was achieved without a discernable increase …

judgments. We find that source credibility moderates the effect of correction on confidence: correction decreases confidence … when a product recommendation comes from a high credibility source but increases confidence when the same message comes … from a low credibility source. As a result, correction increases the effectiveness of recommendations from low credibility …

Continuos credibility effects are incorporated into a simple model of optimal monetary policy. The resulting model … provides explanations for a number of "folk theorems" about credibility in monetary policy. A central bank with low initial … credibility pursues a more restrictive policy than a central bank with high initial credibility. It accommodates shocks less and …