Inflation target credibility in times of high inflation

Historical U.S. Money Growth, Inflation, and Inflation Credibility

and quantity indexes are calculated separately for components of GDP and therefore the difference between nominal GDP and real GDP growth is only approximately equal to the change in the GDP price index. With fixed-weights, the GDP deflator is defined as the ratio of nominal to real GDP and hence the gap between nominal and real GDP growth rates is precisely equal to the growth rate in the GDP ...

Credibility and Targeting Expected Inflation

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 ...

Announcements and Credibility under Inflation Targeting

We inspect how inflation target announcements are instrumental in building central bank credibility and shaping the public’s inflation expectations. Investigating the role of announcements in two early adopters of inflation targeting by using a time varying credibility measure, we find that both the accuracy and the frequency of inflation announcements have a positive impact on how much attenti...

The Relation Between Inflation and Inflation Uncertainty In Iran

Non-Linear Dynamics of Inflation in High Inflation Economies

Attempts by governments to finance a substantial proportion of expenditure by seigniorage can lead to multiple inflationary equilibria. Theoretical models suggest that, in these circumstances, inflation follows a non-linear process with up to three steady states and that the stability characteristics of these depend on the process by which expectations are formed. In this paper we show that the...