Sims (2008) argues that rational inattention and differences of opinion in expected inflation can generate excess investment in real capital. See also Adrian and Shin (2009). 18  ToTEM is the Bank of Canada’s principal projection and policy-analysis model for the Canadian economy. It is a medium-scale, open-economy, dynamic-stochastic general-equilibrium (DSGE) model with multiple goods.
See Murchison and Rennison (2006); and Dorich, Mendes, and Zhang (2011). 19  Amano, Engle-Warnick and Shukayev (2011). 6  BIS central bankers’ speeches  extended to investigate many more questions, including how central bank communications influence people’s decisions or the tendency people have to extrapolate the present into the future. Conclusion I would like to conclude with the following observation.