scholarly journals Imperfect Credibility and Robust Monetary Policy

2013 ◽  
Author(s):  
Richard Dennis
Keyword(s):  
Monetary Policy ◽  
Imperfect Credibility

scholarly journals Monetary policy and inflationary shocks under imperfect credibility

2012 ◽  
Vol 116 (3) ◽  
pp. 571-574 ◽  
Author(s):  
Matthieu Darracq Pariès ◽  
Stéphane Moyen
Keyword(s):  
Monetary Policy ◽  
Imperfect Credibility

scholarly journals Imperfect Credibility versus No Credibility of Optimal Monetary Policy

2021 ◽  
Vol 72 (1) ◽  
pp. 43
Author(s):  
Jean-Bernard Chatelain ◽  
Kirsten Ralf
Keyword(s):  
Monetary Policy ◽  
Optimal Monetary Policy ◽  
Imperfect Credibility

scholarly journals INFLATION TARGETING UNDER IMPERFECT CREDIBILITY: LESSONS FROM INDONESIAN EXPERIENCE

2011 ◽  
Vol 13 (3) ◽  
pp. 271-306
Author(s):  
Harmanta Harmanta ◽  
M. Barik Bathaluddin ◽  
Jati Waluyo
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Policy Instrument ◽  
Jel Classification ◽  
Inflation Target ◽  
Sacrifice Ratio ◽  
Economic Agents ◽  
Inflation Expectation ◽  
Imperfect Credibility

This paper try to assess role of credibility in the implementation of inflation targeting framework in Indonesia. It illustrates how credibility may play an important role in the evolution of the Indonesian monetary policy. Knowing the degree of credibility would beneficial for Bank Indonesia (BI) to understand how to adjust policy instrument to achieve a long-term inflation target. Scaled from zero (purely not credible) to one (perfect credibility), our quantitative measurements found that credibility index for Indonesian monetary policy converge to around 0.5. Refer to projection and simulation results in this paper, the study shows expectation inflation of economic agents is strongly influenced by monetary policy credibility. The more credible the monetary policy, the faster inflation expectation would anchor to its target. In addition, high credibility also increase the efficiency of the monetary policy transmission since the disinflation cost represented by sacrifice ratio is lower. Under imperfect credibility the central bank prefer to attain its inflation target gradually, and if the credibility stock is doubled, then achieving its long-term inflation target required a lot shorter time (approximately 0.4 periods than the baseline). JEL Classification: E31, E52, E58, E61Keywords: Disinflation, Monetary Policy, Imperfect Credibility, Sacrifice Ratio

scholarly journals INFLATION TARGETING UNDER IMPERFECT CREDIBILITY BASED ON ARIMBI (Aggregate Rational Inflation - Targeting Model for Bank Indonesia); LESSONS FROM INDONESIAN EXPERIENCE

2011 ◽  
Vol 13 (3) ◽  
Author(s):  
Harmanta Harmanta ◽  
M. Barik Bathaluddin ◽  
Jati Waluyo
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Policy Instrument ◽  
Jel Classification ◽  
Inflation Target ◽  
Sacrifice Ratio ◽  
Economic Agents ◽  
Inflation Expectation ◽  
Imperfect Credibility

This paper try to assess role of credibility in the implementation of inflation targeting framework in Indonesia. It illustrates how credibility may play an important role in the evolution of the Indonesian monetary policy. Knowing the degree of credibility would beneficial for Bank Indonesia (BI) to understand how to adjust policy instrument to achieve a long-term inflation target.Scaled from zero (purely not credible) to one (perfect credibility), our quantitative measurements found that credibility index for Indonesian monetary policy converge to around 0.5. Refer to projection and simulation results in this paper, the study shows expectation inflation of economic agents is strongly influenced by monetary policy credibility. The more credible the monetary policy, the faster inflation expectation would anchor to its target. In addition, high credibility also increase the efficiency of the monetary policy transmission since the disinflation cost represented by sacrifice ratio is lower. Under imperfect credibility the central bank prefer to attain its inflation target gradually, and if the credibility stock is doubled, then achieving its long-term inflation target required a lot shorter time (approximately 0.4 periods than the baseline).JEL Classification: E31, E52, E58, E61Keywords: Disinflation, Monetary Policy, Imperfect Credibility, Sacrifice Ratio

Imperfect Knowledge and Monetary Policy

2006 ◽  
Author(s):  
Vítor Gaspar ◽  
Otmar Issing ◽  
Oreste Tristani ◽  
David Vestin
Keyword(s):  
Monetary Policy ◽  
Imperfect Knowledge
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