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Naveen Srinivasan and Pankaj Kumar
''Inflation Persistence: Does Credibility of the Monetary Regime Matter?''
( 2012, Vol. 32 No.4 )
Despite widespread recognition that credibility is an important determinant of inflation persistence, surprisingly little empirical evidence exists to support this hypothesis. We investigate this hypothesis using data for US and UK. Our results suggest that the degree of inflation persistence is strongly influenced by regime credibility.
Keywords: Inflation Persistence; Credibility; Kalman Filter
JEL: E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General
E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
Manuscript Received : Aug 10 2012 Manuscript Accepted : Oct 22 2012

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