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dc.contributor.authorDräger, Lenaen_US
dc.date.accessioned2011-09-05en_US
dc.date.accessioned2011-10-06T15:40:32Z-
dc.date.available2011-10-06T15:40:32Z-
dc.date.issued2011en_US
dc.identifier.pidoi:10.3929/ethz-a-006543954en_US
dc.identifier.urihttp://hdl.handle.net/10419/50363-
dc.description.abstractThe DSGE model with endogenous and time-varying sticky information in Dräger (2010) is extended by allowing agents' recursive choice between forecasts under rational or sticky information to affect the model solution. Dynamic equilibrium paths generate highly persistent series for output, inflation and the nominal interest rate. Agents choose predictors in a near-rational manner and we find that the share of agents with rational expectations reacts to the overall variability of aggregate variables. The model can generate hump-shaped responses of inflation and output to a monetary policy shock if the degree of inattentiveness is sufficiently high. Finally, feedback from agents' degree of inattentiveness to the model solution affects the determinacy region of the model. The Taylor principle is then only a necessary condition for determinacy, and monetary policy should target the output gap as well in order to ensure a unique and stable solution.en_US
dc.language.isoengen_US
dc.publisherKOF Zürichen_US
dc.relation.ispartofseriesKOF working papers // KOF Swiss Economic Institute, ETH Zurich 285en_US
dc.subject.jelE31en_US
dc.subject.jelE37en_US
dc.subject.jelE52en_US
dc.subject.ddc330en_US
dc.subject.keywordEndogenous sticky informationen_US
dc.subject.keywordheterogeneous expectationsen_US
dc.subject.keywordDSGE modelsen_US
dc.subject.keywordpersistenceen_US
dc.titleEndogenous persistence with recursive inattentivenessen_US
dc.typeWorking Paperen_US
dc.identifier.ppn667713875en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:KOF Working Papers, KOF Konjunkturforschungsstelle, ETH Zürich

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