Branch, William A.Evans, George W., 1949-Carlson, JohnMcGough, Bruce2006-10-022006-10-022006-06-22https://hdl.handle.net/1794/342311 p.This paper develops an adaptive learning formulation of an extension to the Ball, Mankiw and Reis (2005) sticky information model that incorporates endogenous inattention. We show that, following an exogenous increase in the policymaker’s preferences for price vs. output stability, the learning process can converge to a new equilibrium in which both output and price volatility are lower.179460 bytesapplication/pdfen-USOptimal monetary policyBounded rationalityEconomic stabilizationAdaptive learningWorking Paper