Problem
1. What has been the general experience of countries that have adopted inflation targeting?
2. What are the arguments for and against central bank independence?
3. Suppose that during the last ten years Nicole tried to forecast future inflation rates to negotiate her salary. Every year she used all available information and even incorporated news about the conduct of monetary policy. However, her forecasts were sometimes above and sometimes below the actual inflation rate. Was Nicole forming rational expectations?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.