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Central Bank credibility and inflation expectations: a microfounded forecasting approach

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  • Issler, João Victor
  • Soares, Ana Flávia

Abstract

Credibility is elusive and no generally agreed upon measure of it exists. Despite that, Blinder (2000) generated a consensus in the literature by arguing that ”A central bank is credible if people believe it will do what it says”. It is very hard to argue against such a definition of credibility, being the reason why it became so popular among central bankers and academics alike.

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  • Issler, João Victor & Soares, Ana Flávia, 2019. "Central Bank credibility and inflation expectations: a microfounded forecasting approach," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 812, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    • Handle: RePEc:fgv:epgewp:812
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