Recent research has renewed interest in the exploration of the optimal design of monetary policy institutions in the presence of uncertainty. In this paper, we revisit the rationale for delegation to a weight-conservative central banker when the social planner's knowledge about the true...

This paper offers a theory of model reference adaptive beliefs as a selection device in Markov-switching economies under equilibrium indeterminacy. Consistent with the classical rational choice paradigm, our theory requires that endogenous expectations be replaced with a general-measurable...