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Monetary Policy, Endogenous Inattention, and the Volatility Trade-Off
Branch, William; Carlson, John B.; Evans, George W.; … - 2007
This paper addresses the output-price volatility puzzle by studying the interaction of optimal monetary policy and agents' beliefs. We assume that agents choose their information acquisition rate by minimizing a loss function that depends on expected forecast errors and information costs....
Persistent link: https://www.econbiz.de/10014223070
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Adaptive Learning, Endogenous Inattention, and Changes in Monetary Policy
Branch, William; Carlson, John B.; Evans, George W.; … - 2007
This paper develops an adaptive learning formulation of an extension to the Ball, Mankiw, and Reis (2005) sticky …'s preferences for price vs. output stability, the learning process can converge to a new equilibrium in which both output and price …
Persistent link: https://www.econbiz.de/10014223413