This paper studies the interaction between capital income taxation and a means tested age pension in the context of an … taxation (Conesa et al. (2009)), predicated on the idea that capital is a complement with retirement leisure. This leads … income taxation in a life-cycle context. …

This paper develops a model of policy regime uncertainty and its consequences for stabilizing expectations. Because of … learning dynamics, uncertainty about monetary and fiscal policy is shown to restrict, relative to a rational expectations … analysis, the set of policies consistent with macroeconomic stability. Anchoring expectations by communicat- ing about monetary …

This paper develops a theory of expectations-driven business cycles based on learning. Agents have incomplete knowledge … about how market prices are determined and shifts in expectations of future prices affect dynamics. In a real business cycle … consumption and leisure. Output volatility is comparable with a rational expectations analysis with a standard deviation of …

assumption that belief formation be treated as a classical hypothesis test, which we label inferential expectations, can explain … predictions. In our stochastic environment, inferential expectations with a low test size alpha (conservative inferential … expectations) predict exchange rates better than rational expectations in ten sessions out of twelve. Belief conservatism appears …