Negro, Marco Del; Eusepi, Stefano - Federal Reserve Bank of New York - 2010
This paper provides evidence on the extent to which inflation expectations generated by a standard Christiano et al … this model that differ in terms of the behavior of, and the public’s information on, the central banks’ inflation target …, allegedly a key determinant of inflation expectations. We find that: 1) time-variation in the inflation target is needed to …