form expectations using adaptive learning rather than rational expectations (RE). The output multipliers for government … episodes of "fiscal consolidations." JEL classification: E62, D84, E21, E43 Key words: Government Purchases, Expectations …, Output Multiplier, Fiscal Consolidation, Taxation …

We consider the impact of anticipated policy changes when agents form expectations using adaptive learning rather than … rational expectations. To model this we assume that agents combine limited structural knowledge with a standard adaptive …-up there are important deviations from both rational expectations and purely adaptive learning. Our approach could be applied …

form expectations using adaptive learning rather than rational expectations (RE). The output multipliers for government …

unconventional policies that aim to increase households' spending directly through managing their expectations. We first show … theoretically and empirically that higher in ation expectations increase households' consumption. We then design a difference … demand via managing expectations. Whereas unconventional fiscal policy increases households' expectations and spending …

substantially. We document this fact by comparing an easy-to-grasp expectations-based policy, unconventional fiscal policy, with a … consumption via managing inflation expectations based on the Euler equation. Unconventional fiscal policy uses trivial … announcements of future consumer-price increases to boost inflation expectations and consumption expenditure on impact. Instead …

should intervene in the business cycle. Following Ramey (2011b), we include expectations held by consumers and firms into the … findings also underscore the need to account for expectations, as failing to do so leads to significant misinterpretation of …