deviations from active monetary policy, inflation expectations remain anchored and the model captures the monetary approach … would improve welfare by anchoring agents' expectations. …

business cycle. We compare our findings to a standard model with rational expectations by means of impulse responses. We …

interest rate. We show, in a standard monetary model with forward-looking expectations, data uncertainty and parameter …-looking expectations and uncertainty in the model. …

A central tenet of inflation targeting is that establishing and maintaining well-anchored inflation expectations are … public forms expectations and policymakers must formulate and implement monetary policy. Using an estimated model of the U ….S. economy, we show that monetary policy rules that would perform well under the assumption of rational expectations can perform …

persist for some time. Thus, belief dynamics are a source of apparent excess volatility relative to a rational expectations …

asset price behaviour, since the algorithm converges relatively fast to rational expectations. On the other hand, constant …