Working Paper
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.
Suggested Citation
Branch, William, John B. Carlson, George Evans, and Bruce McGough. 2006. “Adaptive Learning, Endogenous Inattention, and Changes in Monetary Policy.” Federal Reserve Bank of Cleveland, Working Paper No. 06-10. https://doi.org/10.26509/frbc-wp-200610
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