This paper evaluates inflation targeting in the context of recent theoretical developments concerning the issue of creditability. The first part of the paper argues that the problems of operational and political credibility inherent in a reputation based inflation targeting policy would be avoided by a rule based inflation expectation targeting policy. The second part of the paper demonstrates ...

This paper argues that inflation-targeting central banks should announce explicit loss function with numerical relative weights on output-gap stabilization and use and announce optimal time-varying instrument-rate paths and corresponding inflation and output-gap forecasts. Simple voting procedures for forming the Monetary Policy Committee’s aggregate loss function and time-varying instrument-ra...

I am very happy to have the opportunity to participate in this conference and to honor Ben Friedman’s work. Ben deserves to be honored. He is not only a great economist; he is also a wonderful person. The Gerlach and Jordan (2011) paper is organized around a great idea, namely comparing Ben’s thinking about the tactics and strategy of monetary policy with the practical monetary policy of the Sw...

the main objective of this paper is to investigate the effects of monetary regime (countries with inflation targeting monetary policy versus countries with exchange rate anchor) on the extent of exchange rate pass-through over the period of 1999-2010. to achieve this objective, the econometric model has been estimated by dynamic panel data approach and arrelano- bond (ab) method. the empirical ...

We propose a new approach to measuring long-run inflation risk, the inflation risk premium, and inflation expectations for the UK over the period 1985–2012. By adding long-term bond futures to the information set of inflation-indexed and nominal bonds, inflation risk is measured as an incremental time-varying covariance obtained from a trivariate GARCH model with dynamic conditional correlation...