Monetary Policy Credibility: Is there a Magic Bullet?

Naveen Srinivasan, Vidya Mahambare () and Francesco Perugini

Working Papers from Madras School of Economics,Chennai,India

Abstract: This paper examines the concept of monetary policy credibility from both the theoretical and practical viewpoints. It also discusses the advantages of high credibility and explains measures that can be taken to enhance it. The article reviews a number of studies that have examined the credibility of monetary policy making over the past decade. Our main conclusion is that credibility is an elusive thing. The only way to be sure of acquiring it is to earn it by deeds. The existing theoretical literature would benefit a great deal by taking this into consideration.

Keywords: Monetary Policy; Credibility; Institutions (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2015-06
New Economics Papers: this item is included in nep-mac, nep-pbe and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:mad:wpaper:2015-108

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