MONETARY POLICY, ENDOGENOUS INATTENTION AND THE VOLATILITY TRADE-OFF

• 成果类型: Article
• 署名作者: Branch, William A.; Carlson, John; Evans, George W.; McGough, Bruce
• 署名单位: University of California System; University of California Irvine; Federal Reserve System - USA; Federal Reserve Bank - Cleveland; University of Oregon
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/j.1468-0297.2008.02222.x
• 发表日期: 2009
• 页码: 123-157
• 关键词: sticky information; macroeconomic stability; general equilibrium; rules; inflation; prices; output; economies

摘要

This article considers the interaction of optimal monetary policy and agents' beliefs. We assume that agents choose their information acquisition rate by minimising 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.