interbank market. The novel feature of the model is that the expectations of the interbank market outcomes determine the …

achieve robustness against incomplete information about the structure of the economy by distorting their expectations in a … particular direction. It shows how a linear rational expectations equilibrium under concern for robustness can be solved by … responses of private consumption to government expenditure shocks under robust expectations. …

This paper analyses the role of inflation expectations in the euro area. On one hand, the question is how inflation … expectations affect both inflation and output, and, on the other hand, how inflation expectations reflect developments in these … variables. The analyses make use of a simple VAR model of inflation, inflation expectations and the output gap that allows for …

generate booms in the housing market in accordance with the average behavior in the data; expectations on monetary policy and … loan-to-value ratios reduce the severity of expectations-driven cycles and the volatility of household debt, aggregate …