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The purpose of this paper is to make an empirical analysis concerning time-inconsistency problem (TIP) based on a sample of 12 countries for the period from 1993 to 2011.

The existence of TIP only makes sense if there is a trade-off between inflation and unemployment and when there is a causal relationship indicating that with more inflation, unemployment is reduced (as suggested by the Phillips curve). Hence, TIP is observed by testing the existence of cointegration between inflation rate and unemployment rate series and analyzing the sign of the estimated coefficient of the cointegration vector.

The findings indicate that the large majority of countries in the sample have policies that are consistent with long-term goals. Furthermore, it is possible to conjecture that the traditional argument that developing countries have weak institutions and thus present a fertile ground for TIP or that the adoption of inflation targeting (IT) can avoid TIP is not necessarily true.

This study sheds light on four important issues. First, has the change in the mindset of the monetary policy management from the 1990s eliminated TIP? Second, is TIP a sickness only for developing countries? Third, is IT associated with TIP? Fourth, has the TIP increased around the world due to the subprime crisis? In short, this paper is an advance on the empirical literature on TIP and it is a very important overview for observing the present day conduct of the monetary policy through the international experience.

The purpose of this paper is to demonstrate that both the reputation of the monetary authority and the credibility of the regime of inflation targeting are important to reduce the inflation bias and the effort of the monetary authority in an emerging economy.

The paper develops a model which shows that the gain of credibility reduces the effort of the monetary authority in the conduct of monetary policy. The paper presents an econometric analysis for Brazil through ordinary least squares, generalized method of moments (GMM), system of equations by GMM and vector autoregressive.

The findings suggest that the reputation of the monetary authority is important to the improvement of credibility, and the gains of credibility reduce the effort of the monetary authority in the conduct of monetary policy, reducing the variations of the monetary base.

In the theoretical field, the study develops a model which shows that credibility is important to reduce both the inflation bias and the efforts of the monetary authority in the conduct of monetary policy. In the empirical field: first, it proposes a new index of reputation for the monetary authority; second, it demonstrates that the gain of reputation improves credibility, but also that attempts to exploit the output-inflation trade-off reduces credibility; third, the analysis found that the gains of credibility reduce the efforts of the monetary authority in the conduct of monetary policy.

The purpose of this paper is to analyze the influence of macroeconomic variables and economic policies on expectations and confidence of entrepreneurs. It provides an econometric analysis of the expectation transmission channel under inflation targeting in Brazil, emphasizing the effect of inflation targeting credibility on the business confidence of industrial entrepreneurs.

Based on ordinary least square (OLS), generalized method of moments (GMM) and vector autoregression (VAR), the paper provides empirical evidence about the influence of inflation targeting credibility and macroeconomic policies on expectations and confidence of entrepreneurs and, as a consequence, on industrial production.

The evidence for the Brazilian economy suggest that monetary and fiscal policies as well as the credibility of the monetary regime affect economic activity by their impact on expectations of entrepreneurs.

Development of macroeconomic stability is important to the expectations formed by entrepreneurs and, therefore, for industrial production. In particular, inflation targeting credibility stimulates industrial production, since it increases the confidence of entrepreneurs about the functioning of the economy and their businesses.

The results suggest new insights about the influence of economic policies on the real side of the economy, pointing out that the conduct of economic policies in emerging countries with inflation targets are likely to affect the expectations of entrepreneurs and therefore their production decisions.