Adaptive Learning, Endogenous Inattention, and Changes in Monetary Policy

Datum

2006-06-22

Zeitschriftentitel

ISSN der Zeitschrift

Bandtitel

Verlag

University of Oregon, Dept of Economics

Zusammenfassung

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.

Beschreibung

11 p.

Schlagwörter

Optimal monetary policy, Bounded rationality, Economic stabilization, Adaptive learning

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