A promise by a government or a central banker about future policies. Commitment, sometimes called pre-commitment, promises that monetary or fiscal policies will not be changed, or that if policy changes are needed they will take specified forms. This may not be fully credible if in the future a change in the economy creates incentives for the government to renege on their promises. See also credibility.
|Reference: Oxford Press Dictonary of Economics, 5th edt.|