Hommes, Cars H.; Mavromatis, Kostas; Özden, Tolga; Zhu, Mei - In: Quantitative economics : QE ; journal of the … 14 (2023) 4, pp. 1401-1445
We introduce Behavioral Learning Equilibria (BLE) into a multivariate linear framework and apply it to New Keynesian DSGE models. In a BLE, boundedly rational agents use simple, but optimal AR(1) forecasting rules whose parameters are consistent with the observed sample mean and autocorrelation...