Arbeitspapier

Optimal monetary policy when agents are learning

We derive the optimal monetary policy in a sticky price model when private agents follow adaptive learning. We show that this slight departure from rationality has important implications for policy design. The central bank faces a new intertemporal trade-off, not present under rational expectations: it is optimal to forego stabilizing the economy in the present in order to facilitate private sector learning and thus ease the future intratemporal inflation-output gap trade-offs. The policy recommendation is robust: the welfare loss entailed by the optimal policy under learning if the private sector actually has rational expectations is much smaller than if the central bank mistakenly assumes rational expectations when in fact agents are learning.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 3072

Klassifikation
Wirtschaft
Existence and Stability Conditions of Equilibrium
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Expectations; Speculations
Monetary Policy
Thema
optimal monetary policy
learning
rational expectations
Geldpolitik
Inflationserwartung
Lernprozess
Adaptive Erwartung
Theorie

Ereignis
Geistige Schöpfung
(wer)
Molnár, Krisztina
Santoro, Sergio
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2010

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Molnár, Krisztina
  • Santoro, Sergio
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2010

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