We analyze how trust affects the transmission of negative demand and supply shocks using a behavioral macroeconomic model. We define trust to have two dimensions: trust in the central bank's inflation target and trust in the central bank's capacity to stabilize the business cycle. We find, first, that when large negative shocks occur, the subsequent trajectories taken by output gap and inflation typically coalesce around a good and a bad trajectory. Second, these good and bad trajectories are correlated with movements in trust. In the bad trajectories, trust collapses, and in the good trajectories, it is not affected. This feature is stronger when a negative supply shock occurs than in the case of a negative demand shock. Third, initial conditions, in particular the initial state of inflation and output expectations, matter. Unfavorable initial expectations drive the economy into a bad trajectory, and favorable initial expectations produce good trajectories. Fourth, we analyze the sensitivity of our results with respect to the size of the shocks. Fifth, we derive implications of our results for our capacity of making forecasts about the effects of large demand and supply shocks.

中文翻译：

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信托与货币政策

我们使用行为宏观经济模型分析信任如何影响负需求和供给冲击的传播。我们将信任定义为两个维度：对央行通胀目标的信任和对央行稳定经济周期能力的信任。首先，我们发现，当发生较大的负面冲击时，产出缺口和通货膨胀所采取的后续轨迹通常会围绕一个好的和一个坏的轨迹结合起来。其次，这些好的和坏的轨迹与信任的变化相关。在糟糕的轨迹中，信任会崩溃，而在良好的轨迹中，信任不会受到影响。当发生负供给冲击时，这一特征比发生负需求冲击时更强。第三，初始条件，特别是通胀和产出预期的初始状态很重要。不利的初始预期会将经济推向糟糕的轨迹，而有利的初始预期则会产生良好的轨迹。第四，我们分析了结果对冲击大小的敏感性。第五，我们得出了我们的结果对我们预测大规模供需冲击影响的能力的影响。