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DESCRIPTION;ENCODING=QUOTED-PRINTABLE:Research Seminar - Christopher Gibbs (University of Sydney) - Optimal Monetary Policy when Expectations are Rational, Fixed, Learned, or Anything in Between =0D=0A Abstract: =0D=0A There is broad agreement that expectations play a central role in the transmission of monetary policy to real economic activity. There is far less agreement, however, in how people form expectations. We revisit optimal monetary policy design in a model where expectations are formed using a mix of rational and adaptive learning beliefs. The beliefs approximate several alternative models of expectation formation - fixed, learning, myopic, level-k, and rational - using only two parameters. We derive the optimal targeting criterion in the model as a function of these parameters, i.e., in terms of how beliefs are formed. A weighted average inflation target plus adjustments for belief persistence and the zero lower bound characterize optimal policy. Our target criterion provides a theoretical justification for Flexible Average Inflation Targeting, where we make explicit what average and flexible should mean.=0D=0A  =0D=0A Online Research seminars organized by the Bank of Finland's Research Unit are open to all researchers interested in the subjects covered.  Those wishing to attend a seminar are kindly asked to register in advance, by filling in  the Online Registration Form . =0D=0A The registration for each seminar is open until 9:00 am the day of the seminar. You will receive a link to join the seminar by email at the latest one hour before the seminar is scheduled to begin. =0D=0A
DTEND:20240506T133000Z
DTSTAMP:20240412T080702Z
DTSTART:20240506T120000Z
LOCATION:MS Teams
SUMMARY:Christopher Gibbs (University of Sydney) - Optimal Monetary Policy when Expectations are Rational, Fixed, Learned, or Anything in Between 
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