In this paper we systematically evaluate how central banks respond to inflation deviations from target. We present a … stylized New Keynesian model in which agents' inflation expectations are sensitive to inflation deviations from target. To (re …-)establish credibility, optimal monetary policy under discretion is shown to set higher interest rates today if average inflation exceeded …

In this paper we systematically evaluate how central banks respond to deviations from the inflation target. We present … a stylized New Keynesian model in which agents' inflation expectations are sensitive to deviations from the inflation … inflation exceeded the target in the past. Moreover, the central bank responds non-linearly to past inflation gaps. This is …

In this paper we systematically evaluate how central banks respond to inflation deviations from target. We present a … stylized New Keynesian model in which agents' inflation expectations are sensitive to inflation deviations from target. To (re …-)establish credibility, optimal monetary policy under discretion is shown to set higher interest rates today if average inflation exceeded …

Following the Asian financial crisis in 1997-98, a number of Asian central banks adopted inflation targeting. While it … is possible for the average inflation rate to be close to target, deviations of inflation could nevertheless be large and … protracted. We therefore explore how successful this framework has been by looking at the persistence of inflation, as measured …

In this paper we systematically evaluate how central banks respond to deviations from the inflation target. We present … a stylized New Keynesian model in which agents' inflation expectations are sensitive to deviations from the inflation … inflation exceeded the target in the past. Moreover, the central bank responds non-linearly to past inflation gaps. This is …

In this paper we systematically evaluate how central banks respond to deviations from the inflation target. We present … a stylized New Keynesian model in which agents' inflation expectations are sensitive to deviations from the inflation … inflation exceeded the target in the past. Moreover, the central bank responds non-linearly to past inflation gaps. This is …

1974–2008. We find, first, that newly appointed governors fight inflation more aggressively during the first four to eight … quarters of their tenure in an effort to establish a reputation for being inflation averse. Second, we find a significantly … stronger reaction to inflation by newly appointed governors working within monetary policy frameworks comprised of an at least …

1974-2008. We find, first, that newly appointed governors fight inflation more aggressively during the first four to eight … quarters of their tenure in an effort to establish a reputation for being inflation averse. Second, we find a significantly … stronger reaction to inflation by newly appointed governors working within monetary policy frameworks comprised of an at least …

inflation. Based on a range of panel regressions, we find that accurate perceptions of recent price changes are an important … determinant of the accuracy of next-year inflation expectations. The realism of inflation perceptions is, in turn, related to the … frequent newspaper usage does not necessarily reduce errors in inflation perceptions. …

significantly more favorable output-inflation trade-off than his peers. …