English, Article, Journal or magazine article edition: Monetary Policy, Endogenous Inattention, and the Volatility Trade-off William A. Branch; John Carlson; George W. Evans; ...

User activity

Share to:
 
Bookmark: http://trove.nla.gov.au/version/30335
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Monetary policy, endogenous inattention, and the volatility trade-off
Author
  • William A. Branch
  • John Carlson
  • George W. Evans
  • Bruce McGough
Physical Description
  • preprint
Notes
  • optimal policy, expectations, adaptive learning
  • RePEc:red:sed006:106
  • 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. Endogenous inattention is a Nash equilibrium in the information processing rate. Although a decline of policy activism directly increases output volatility, it indirectly anchors expectations, which decreases output volatility. If the indirect effect dominates then the usual trade-off between output and price volatility breaks down. This provides a potential explanation for the "Great Moderation" that began in the 1980's.
  • expectations, optimal monetary policy, bounded rationality, economic stability, adaptive learning
  • RePEc:ore:uoecwp:2004-19
  • Monetary policy ; Inflation (Finance)
  • RePEc:fip:fedcwp:0411
Language
  • English
Contributed by
OAIster

Get this edition

  • Set up My libraries

    How do I set up "My libraries"?

    In order to set up a list of libraries that you have access to, you must first login or sign up. Then set up a personal list of libraries from your profile page by clicking on your user name at the top right of any screen.

  • All (1)
  • Unknown (1)
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this edition

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this version

Add a comment