Suppose the statistical office of a country does a poor job in measuring inflation and reports an

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Suppose the statistical office of a country does a poor job in measuring inflation and reports an annualized inflation rate of 4% for a few months, while the true inflation rate has been around 2.5%. What will happen to the central bank’s credibility if it is engaged in inflation targeting and its target is 2%, plus or minus 0.5%?

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The Economics Of Money Banking And Financial Markets

ISBN: 978-0134376936

6th Canadian Edition

Authors: Frederic S Mishkin ,Apostolos Serletis

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