Scholarly Comments on Academic Economics

“Credibility” in Context: Do Central Bankers and Economists Interpret the Term Differently?

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Abstract

The idea that the ‘credibility’ of monetary policy is important receives almost universal assent. But the word can mean very different things in different contexts. In particular, the meaning that it has been given by the work of Robert Barro and David Gordon is a very special one. It should not be presumed that in ordinary discussion of ‘credibility’ theirs is always the meaning people have in mind. Consequently, Alan Blinder’s survey on attitudes to ‘credibility’, which failed to specify what he meant by the term, might be most misleading, and if unwarranted inferences are not to be drawn a most careful interpretation of it is required.

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Volume (Issue)
Pages
413-426
Published
JEL classification
B40, E52, E58
Keywords
credibility, central bank independence
Downloads
13,294 article downloads
17,848 complete issue downloads
Total: 31,142

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