This paper investigates optimal monetary policy in an economy, in which the output-inflation trade off faced by the central bank is influenced by two important forces: (i) the presence of uncertain and possibly changing parameters, and (ii) private sector expectations regarding the central...

I present a model of industry dynamics resulting from competition between forward looking, heterogeneous firms that face three simultaneous challenges: learning in the process of production, competing against new entrants able to imitate best practice (albeit imperfectly), and enduring...