Standard models of policy credibility. defined as the expectation that an announced policy will be carried out … announced policy in adverse circumstances. We investigate this alternative notion of credibility, using an "escape clause" model … policy in a given period may lower rather than raise the credibility of a no-devaluation pledge in subsequent periods. in …

Standard models of policy credibility. defined as the expectation that an announced policy will be carried out … announced policy in adverse circumstances. We investigate this alternative notion of credibility, using an "escape clause" model … policy in a given period may lower rather than raise the credibility of a no-devaluation pledge in subsequent periods. in …

Standard models of policy credibility, defined as the expectation that an announced policy will be carried out …, emphasize the preferences of the policymaker, and the role of tough policies in signalling toughness and raising credibility … credibility of a no-devaluation pledge in subsequent periods. We test this implication on data for the interest rate differential …

credibility prior to inflation convergence, the sign of the real interest rate differential may be reversed. Developments in … significantly more credible in 1989-90. As improved credibility further limits their monetary autonomy, the Italian authorities will …