Journal Article

Central bank credibility

Abstract: Major League Baseball Commissioner Bud Selig announced he would crack down on steroid use in baseball, hoping to stop players from doping. He was forced to discipline stars like Rafael Palmeiro, possibly hurting the game immediately, in order to develop a reputation for being tough on steroids. The Federal Reserve System has worked hard over the past few decades not only to lower inflation and keep it low, but also to convince the public that it is dedicated to delivering low inflation over the long haul. This Commentary explains why credibility is so important to monetary policymakers.

Keywords: Inflation (Finance); Banks and banking, Central;

Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Commentary

Publication Date: 2006

Issue: Aug

Order Number: 1