TY  - BOOK
AU  - Jia,Chengcheng
AU  - Wu,Jing Cynthia
ED  - National Bureau of Economic Research.
TI  - Average Inflation Targeting: Time Inconsistency and Intentional Ambiguity 
T2  - NBER working paper series
PY  - 2022///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - January 2022; Hardcopy version available to institutional subscribers
N2  - We study the implications of the Fed's new policy framework of average inflation targeting (AIT) and its ambiguous communication. The central bank has the incentive to deviate from its announced AIT and implement inflation targeting ex post to maximize social welfare. We show two motives for ambiguous communication about the horizon over which the central bank averages inflation as a result of time inconsistency. First, it is optimal for the central bank to announce different horizons depending on the state of the economy. Second, ambiguous communication helps the central bank gain credibility
UR  - https://www.nber.org/papers/w29673
UR  - http://dx.doi.org/10.3386/w29673
ER  -