This paper estimates a New Keynesian model with new and old behavioral elements. Agents in the model exhibit cognitive discounting, or myopia: they discount variables far into the future at higher rates than typically implied in the benchmark model. We investigate the model under different...

We develop a dynamic learning model to study money adoption. Agents own an asset that can potentially serve as money. The asset steadily generates stochastic dividends which can be positive or negative. Agents gradually learn about the distribution of dividends and based on the learning outcomes...

The New Keynesian model with rational expectations unrealistically predicts that unanticipated credible changes in the inflation target lead to an immediate jump in the inflation level while the output gap is unaffected. We set up a theoretical model where agents learn the behaviour of the...

We study the consequences of campaign finance disclosure laws in a model of informative campaign finance. Campaign spending can affect electoral outcomes and also signal policy information to politicians. Under mandatory disclosure donors may engage in spending that runs counter to their...