Alternative Inflation Target monetary policies have been usually studied under the perfect foresight hypothesis. We consider such monetary policies in a bounded rationality framework. In this case, we can distinguish two different scenarios. It is possible to assume bounded rationality only from...

In modern mathematical finance the evolution of several variables such as asset prices, interest rates, latent factors is described, in a continuous time setting, through stochastic differential equations. Nevertheless, in most of the classic literature, these stochastic differential equations...