Elasticity of Attention and Optimal Monetary Policy

Optimal monetary policy depends crucially on whether agents have exogenous, endogenous-inelastic, or endogenous-elastic attention. We show in this paper that, under elastic attention, optimal monetary policy may induce equilibria that are not possible under the other two settings: decision makers choose not to pay any attention to any shocks that generates inefficient economic fluctuations, and welfare loss is at the minimum

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Year of publication:	2020
Authors:	Luo, Shaowen
Other Persons:	Tsang, Kwok Ping (contributor)
Publisher:	[2020]: [S.l.] : SSRN
Subject:	Theorie \| Theory \| Geldpolitik \| Monetary policy \| Preiselastizität \| Price elasticity \| Preisrigidität \| Price stickiness \| Elastizität \| Elasticity

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Extent:	1 Online-Ressource (9 p)
Type of publication:	Book / Working Paper
Language:	English
Notes:	Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 9, 2020 erstellt
Other identifiers:	10.2139/ssrn.3623412 [DOI]
Classification:	E3 - Prices, Business Fluctuations, and Cycles ; E5 - Monetary Policy, Central Banking and the Supply of Money and Credit ; D8 - Information and Uncertainty
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012831615