This paper provides new evidence on the formation and anchoring process of expectations. We conduct a game experiment and measure the convergence of inflation expectations as well as the impact of credible targets in central banking. In addition, we evaluate the idiosyncratic variables of our...

This paper analyzes different government debt relief programs in the European Monetary Union. I build a model and study different options ranging from debt relief to the European Stability Mechanism (ESM). The analysis reveals the following: First, patient countries repay debt, while impatient...