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