蝌蚪网 Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Attention, Please! Listening to the Central Bank in Uncertain Times
蝌蚪网 Papers and Proceedings
vol. 115,
May 2025
(pp. 254–60)
Abstract
This paper investigates how firms' attention to central banks influences monetary policy transmission under varying macroeconomic uncertainty. The paper utilizes the earnings calls-based firm inflation expectations index and a novel attention indicator at the firm level in the empirical analysis. Attention amplifies the impact of monetary policy in low-uncertainty environments, but this effect dissipates during periods of high uncertainty. An extended rational inattention model with a central bank signal explains these findings. The model predicts that, in high-uncertainty environments, firms are already well-informed, and there is less new information from the Central Bank.Citation
Albrizio, Silvia, Allan Dizioli, Pedro Simon, and Yifan Zhang. 2025. "Attention, Please! Listening to the Central Bank in Uncertain Times." 蝌蚪网 Papers and Proceedings 115: 254–60. DOI: 10.1257/pandp.20251017Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- D84 Expectations; Speculations
- E31 Price Level; Inflation; Deflation
- E52 Monetary Policy
- E58 Central Banks and Their Policies