An academic paper titled "Nominal Rigidities, Rational Inattention, and the Optimal Monetary Policy," co-authored by Yin Penghui, assistant professor at the School of Innovation and Development, Central University of Finance and Economics (CUFE), Associate Professor Ou Shengliang of Shanghai University, Assistant Professor Zhang Donghai of the National University of Singapore (NUS), and Associate Professor Zhang Renbin of Shandong University, was recently published online in theJournal of Economic Theory, a top-tier international journal in economics and an AAA-category journal at CUFE.

The paper can be accessed at:https://www.sciencedirect.com/science/article/abs/pii/S0022053125001759.

The study focuses on the formulation logic of optimal monetary policy, a core issue in macroeconomics. Traditional research on optimal monetary policy typically relies on multi-sector models that assume economic agents possess full information or face only exogenous information frictions, leading to the mainstream conclusion that sectors with greater price stickiness should be assigned higher weights in price stabilization. However, in real-world economic environments, information acquisition involves substantial costs. This divergence between theoretical assumptions and reality limits the ability of traditional policy frameworks to fully explain monetary policy allocation in complex markets.

To address this limitation, the research team innovatively introduces the perspective of endogenous information acquisition within the framework of rational inattention, challenging the conventional conclusions. Their analysis indicates that when information acquisition costs are sufficiently high, optimal monetary policy instead assigns lower weights to sectors with stronger price stickiness. This seemingly counterintuitive result stems from the endogenous relationship between firms' attention allocation and nominal rigidities: firms in sectors with more flexible price adjustment tend to devote less attention to macroeconomic conditions. To validate this mechanism, the study further provides robust empirical evidence, offering a new analytical dimension for the design of optimal monetary policy.

Founded in 1969, theJournal of Economic Theoryis one of the most influential international journals in theoretical economics. It primarily publishes original research in areas such as mechanism design, information economics, game theory, macroeconomics, and monetary economics, and enjoys broad global influence and high academic recognition.

Yin Penghui is currently an assistant professor and master's supervisor at the China Economics and Management Academy (CEMA), School of Innovation and Development, CUFE. His research focuses on macroeconomics, expectation formation and management, and household finance, with related work published in several leading international journals.

Writers: YIN Penghui

Reviewers:YUAN Chun

Editors: LI Ying

Approvers: HUO Xiaoran