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 literature: Euler-equation learning, which assumes that consumption decisions are …

equilibrium: eductive stability never obtains. This impossibility theorem has a counterpart when adaptive learning is incorporated …

to fundamental equilibria. learning, recurrent hyperinflations, and macroeconomic policy to combat liquidity traps and …

-referential system, we find that learning dynamics lead to selection of one of the two models. However, there are parameter regions for …

This paper demonstrates that an asset pricing model with least-squares learning can lead to bubbles and crashes as … several mechanisms through which learning impacts stock prices. Extended periods of excess volatility, bubbles and crashes …

models of expectations formation that rely on econometric learning. Some apparently natural policy rules turn out to imply … expectational instability of private agents?learning. We use the standard New Keynesian model to illustrate this problem and survey … learning. We then consider some practical concerns such as measurement errors in private expectations, observability of …