Hossein Askari () and
Mohamed Jaber Additional contact information Mohamed Jaber: Department of International Business, The George Washington University, Postal: 2121 I Street, NW, Washington, DC 20052 USA, http://www.gwu.edu/
While macroeconomic policy credibility has become an increasingly critical factor in limiting monetary policy independence during the floating exchange rate era, its determinants are not adequately understood. Our limited results seem to confirm the popular hypothesis that long-term inflation record is the key factor; with unemployment record also being a factor. More research is needed before economists can advise governments as to the determinants of macroeconomic policy credibility and as to the best and quickest way to establish it in the marketplace. JEL Classification: E58, E44.