Working Paper

The Optimal Monetary Policy Response to Belief Distortions: Model-Free Evidence


Abstract: Data suggest that monetary policy should ease to offset inflation over-pessimism among households.

JEL Classification: E52; E30; D84; E70;

https://doi.org/10.18651/RWP2025-04.

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Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Research Working Paper

Publication Date: 2025-06-23

Number: RWP 25-04