https://macropaperwarehouse.com/authors/hassan-afrouzi/Hassan AfrouziHugo -- gohugo.ioen-usThu, 01 Jan 2026 00:00:00 +0000https://macropaperwarehouse.com/papers/monetary-policy-without-commitment/Thu, 01 Jan 2026 00:00:00 +0000https://macropaperwarehouse.com/papers/monetary-policy-without-commitment/<p>Research question and motivation: Post-pandemic inflation across advanced economies rose to levels not seen since the early 1980s, reviving interest in central bank credibility. The standard quantitative macro models used to interpret this episode assume exogenous central bank reaction functions and inflation targets, which limits their usefulness. This paper instead makes monetary policy endogenous: a welfare-maximizing central bank that lacks the ability to commit re-optimizes every period. The goal is to characterize how lack of commitment shapes long-run inflation and transition dynamics, questions that prior credibility work (Barro-Gordon 1983; Rogoff 1985) could not address because it used static or log-linearized settings.</p>https://macropaperwarehouse.com/papers/tell-me-something-i-dont-already-know-learning-in-low-and-high-inflation-settings/https://macropaperwarehouse.com/papers/tell-me-something-i-dont-already-know-learning-in-low-and-high-inflation-settings/<p>This paper uses randomized control trials (RCTs) applied over time in multiple countries to study whether the economic environment — specifically the level of inflation — affects how agents learn from new information. The main finding is that as inflation rose in advanced economies, both households and firms became more attentive to and informed about publicly available news about inflation, causing them to respond less to exogenously provided information about inflation and monetary policy in the RCT treatments. When agents are already well-informed about the current inflation environment (because high inflation makes it salient), additional information provision moves their beliefs less — the marginal value of information is decreasing in prior attentiveness. Complementary evidence from Uruguay (persistently high inflation) and New Zealand (persistently low inflation) confirms the cross-sectional pattern: agents in high-inflation environments have stronger priors and respond less to information treatments. The results imply that central bank communication interventions are more effective during low-inflation periods when agents are less informed.</p>