Matthes, Christian; Rondina, Francesca - Department of Economics and Business, Universitat … - 2012
This paper investigates the role of learning by private agents and the central bank (two-sided learning) in a New … these beliefs through a statistical learning algorithm as new information becomes available. We study the short-run dynamics … demonstrate that two-sided learning can generate substantial increases in volatility and persistence, and alter the behavior of …
