Adaptive learning, endogenous inattention, and changes in monetary policy

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.

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Year of publication:	2006
Authors:	Branch, William A. ; Carlson, John B. ; Evans, George W. ; McGough, Bruce
Institutions:	Federal Reserve Bank of Cleveland
Subject:	Monetary policy \| Information theory

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Extent:	application/pdf
Series:	Working Paper.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 0610
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005728987