Gaspar, Vitor; Smets, Frank; Vestin, David - In: Journal of the European Economic Association 4 (2006) 2-3, pp. 376-385
perceived inflation persistence by the private sector. Such a sophisticated policy reduces inflation persistence and inflation … volatility at little cost in terms of output gap volatility. Persistent responses to cost-push shocks and stability of inflation … play is very different. In the case of commitment it relies on expectations of future policy actions affecting inflation …