Inflation targeting as a signaling mechanism

This paper theoretically investigates inflation targeting when there is asymmetric information between the Central Bank and the public. The main argument of this study is that the inflation target can be used as a signaling mechanism through which the private sector learns about the private information of the Central Bank about future inflation and output. Thus, inflation targeting increases transparency and this causes the monetary policy actions (changes in the interest rate) to be more effective. I construct a Kalman filter algorithm to analyze the information and learning dynamics between the Central Bank and a representative private-sector agent. An increase (decrease) in the interest rate and the inflation target signals that the Central Bank has private information that inflation and output will be higher (lower) in the future thus the public expect inflation to be higher (lower) in the future. The main results of the paper are as follows. First, the private-sector agents (public) revise their expectations about future inflation and output after observing the actions of the Central Bank: changes in the interest rate and the inflation target. Second, in the case of inflation targeting, the response of inflation to a monetary policy shock (change in the interest rate) is higher than it is in the case of no inflation targeting. So, when there is inflation targeting the interest rate tool of the CB is more effective in decreasing inflation.     

Magnetic Properties of Sm1?x Tb x Ni4B compounds

Physical properties of the Sm_1?x Tb _x Ni₄B (0??x??0.8) compounds have been investigated by means of the X-ray powder diffraction, AC-susceptibility and DC-magnetization techniques. All the compounds studied crystallize in CeCo₄B-type structure with P6/mmm space group. The substitution of Tb for Sm leads to a decrease of the unit-cell parameters a,c and the unit-cell volume V. The magnetic phase transition temperatures are found as 39, 30, 26, 22 and 15 K, for x=0, 0.2, 0.4, 0.6 and 0.8, respectively. In addition, we have seen the second magnetic phase transition around 230 K, at the ac-susceptibility results. We have concluded that this behavior may arise from the Tb?CTb interaction in crystal structure.