economy where (i) private agents have incomplete information and form their expectations using recursive learning algorithms … their target level; and (iii) the central bank, ignoring the exact mechanism used by private agents to form expectations … stabilize expectations and to speed up the learning process the response of the policy instrument to inflation should be …

have incomplete knowledge of the surrounding environment, they form expectations that may deviate substantially from the … policymaking of departing from the benchmark of rational expectations and assuming instead that agents learn adaptively. It focuses … explicit bounds on inflation, they seem better suited to restrain expectations from drifting significantly away from target …