In the next section we outline some theoretical and empirical results about the relationships between monetary policy, the ináation target of monetary authorities, the level of this target perceived by the public and the long term interest rates dynamics. In section 3, we present the works of Kozicki and Tinsley (1998, 2001a, 2001b) and we establish the interest of this model in our framework. We also provide an illustration of the advantage of the shifting endpoint speciÖcation in comparison to traditional stationary and nonstationary speciÖcations when autoregressive models are used to produce long-horizon expectations. In section 4 we propose two speciÖcations for the long-term perception of the monetary authoritiesíináation.
