We analyze determinacy and stability under learning (E-stability) of rational expectations equilibria in the Blanchard …

learning (DOP) and compare it two limiting cases---certainty equivalence policy (CEP) and cautionary policy (CP). It turns out … learning (DOP) and compare it two limiting cases---certainty equivalence policy (CEP) and cautionary policy (CP). It turns out … CEP, at low levels of inherited inflation the DOP resembles the CP. -- Learning ; inflation expectations ; disinflation …

active learning possibilities has effects on the optimal interest rate rule followed by the central bank.For a wide range of …

, results depend on the learning scheme that is employed.Here, the learning scheme we investigate is that of least …-squares learning (recursive OLS) using the Kalman filter.A novel feature of a learning-based policy as against the central bank …