implementation of Muth’s hypothesis to represent market participants’ inflation expectations under Knightian uncertainty arising from … that processes driving inflation time-series and inflation forecasts undergo nonrecurring structural shifts. In contrast to …

framework, combined with parameter learning, features rich history-dependent uncertainty dynamics. We show that bad news that … greatly amplified when agents have a preference for early resolution of uncertainty. We leverage survey recession probability … historical periods in which uncertainty and risk premia were elevated because of news shocks. …

framework, combined with parameter learning, features rich history-dependent uncertainty dynamics. We show that bad news that … greatly amplified when agents have a preference for early resolution of uncertainty. We leverage survey recession probability … historical periods in which uncertainty and risk premia were elevated because of news shocks …

Central banks face uncertainty about the true location of the effective lower bound (ELB) on nominal interest rates. We …

of model uncertainty. If the degree of model uncertainty becomes more heterogenous, inflation volatility falls due to …We introduce heterogeneity into a monetary policy committee by allowing the degree of model uncertainty to differ … derived. The reason is that inflation, output and the interest rate are convex functions of each member's idiosyncratic degree …

indicators to guide monetary policy decisions. However, these gaps are estimated with a large margin of uncertainty, especially … when composed mainly of TFP gaps. Given the high uncertainty of output gap estimates at present, monetary policy should put … more weight on alternative indicators of inflation pressure such as wage settlements, trends in unit labour costs and a …

Knightian uncertainty about the intertemporal elasticity of substitution and the slope of the Phillips curve. The literature on … optimal robust monetary policy has focused on either imperfect observability of some variables or on parameter uncertainty. We … characterize robust monetary policy analytically under the two types of uncertainty and show that in general they call for a more …

Measuring economic uncertainty is crucial for understanding investment decisions by individuals and firms …. Macroeconomists increasingly rely on survey data on subjective expectations. An innovative approach to measure aggregate uncertainty … exploits the rounding patterns in individuals' responses to survey questions on inflation expectations (Binder, 2017). This …

-sectional distributions of uncertainty and pricing durations are both necessary and sufficient to identify monetary non-neutrality. Finally …

This paper evaluates how initial beliefs uncertainty can affect data weighting and the estimation of models with … adaptive learning. One key finding is that misspecification of initial beliefs uncertainty, particularly with the common … approach of artificially inflating initials uncertainty to accelerate convergence of estimates, generates time-varying profiles …