Bullard, James Brian (contributor); … - 2005
We study how the use of judgement or add-factorsʺ in macroeconomic forecasting may disturb the set of equilibrium … equilibria, can exist in standard macroeconomic environments. Examples include a simple asset pricing model and the New Keynesian … monetary policy framework. Inclusion of judgement in forecasts can lead to self-fulfilling fluctuations, but without the …