| Abstract | Expectation has a critical impact on the effectiveness of monetary policy. As a result, in order to acquire a better policy result, increasing attention has been paid to guiding expectation in monetary policy in recent years. However, expectation is not entirely rational. To better direct the policy practice of monetary policy in guiding expectation, the formulation mechanism of public expectation shall first be well understood. In this paper, anchoring psychology in behavior economics is introduced in the study of expectation formulation mechanism. Based on expectation formulation mechanism anchored by historical information, a mathematical model is first constructed to discuss the impact of anchoring psychology on monetary policy in adjusting output gap and short-term inflation level. From this, a deduction is made for formulation of optimal discretionary policy and policy rule under expectation anchored by historical inflation information, and on the impact of expectation guided by means of information disclosure on inflation expectation and final effectiveness of policy under the two types of monetary policies; then, combined with a method of numerical simulation, a simulation analysis is conducted respectively for relative policy effectiveness of discretionary policy and policy rule under different impacts, while guiding expectation and not guiding expectation; and finally, a robustness test is implemented for results of the simulation analysis. Several major conclusions are acquired in this study: (1) For both discretionary policy and policy rule, with expectation having anchoring effect on historical inflation information, the optimal monetary policy shall be formulated based on the degree of anchoring psychology, and undertake retroregulation against historical inflation information. Only doing so can its effectiveness be exerted to the maximum extent; (2) Under expectation formulation mechanism anchored by historical information, discretionary policy appears to be relatively more effective than policy rule. Implementing discretionary policy may reduce loss of social welfare when suffering any type of impact, while policy rule, under large positive demand impact and positive inflation impact, may bring negative effect when implementing monetary policy; (3) Guiding expectation may not definitely enhance the effectiveness of monetary policy. Under public expectation anchored by historical information, it is not suitable to guide expectation when implementing discretionary policy, no matter under what kind of impact. The policy effectiveness may be improved only when policy rule guides expectation under negative demand impact and negative inflation impact. However, it may be not effective when doing more sufficiently in guiding expectation, but an optimal degree of guiding will always do. (4) The existence of anchoring psychology will reduce effectiveness of monetary policy, whether monetary policy guides expectation or not. For monetary policy without guiding expectation, as the degree of anchoring psychology increases, the policy effectiveness will be gradually reduced, but will be enhanced to some extent when the degree reaches to a certain stage. For monetary policy guiding expectation, as the degree of anchoring psychology increases, the policy effectiveness will be reduced all the way and bring a result of sharp reduction when the degree reaches to a certain stage. Therefore, to enhance the effectiveness of monetary policy, the non-rational anchoring psychology of public expectation shall first be dealt with. The major contributions of this study lie in: (1) By introducing expectation formulation mechanism anchored by historical information into the theoretical frame of price stickiness of new Keynesianism, a new conclusion different from effectiveness of the two monetary policies under rational expectation hypothesis is obtained; (2) Modeling is conducted for information disclosure as a way to guide expectation, and performance of effectiveness of the two monetary policies in guiding expectation is analyzed in detail according to impact sources. And new views different from those in other literatures are presented on policy effectiveness of guiding expectation; (3) The impact of anchoring pshchology on the short-term adjustment of monetary policy and the policy effectiveness of guiding expectation is analyzed, enriching the study on behavioral macroeconomic policy. |