To isolate the impact of the assumption of model-consistent expectations, this paper proposes a baseline case in which households are individually rational, have full information and learn using forecast rules specified as in the minimum state variable representation of the economy. Applying...

This paper develops and structurally estimates a learning model in which firms acquire information about workers' ability by observing their performance over time. A firm consists of a collection of jobs which differ in the informational content of performance, as measured by the dispersion in...

I develop an equilibrium model with collateral constraints in which rational agents are uncertain and learn about the equilibrium mapping between fundamentals and collateral prices. Bayesian updating of beliefs by agents can endogenously generate booms and busts in collateral prices and largely...

This paper investigates a learning model in which information about a worker's ability, unobserved to both the worker and the firm, can be acquired in any period by both parties by observing the worker's performance at a given task. Tasks are differentially informative about productivity: more...

Incorporating adaptive learning into macroeconomics requires assumptions about how agents incorporate their forecasts into their decision-making. We develop a theory of bounded rationality that we call finite-horizon learning. This approach generalizes the two existing benchmarks in the...