interest rate rule, raising the possibility of inefficient fluctuations due to the dependence of expectations on extraneous … combine forward looking expectations and predetermined variables. We consider a variety of specifications that incorporate …

requirement that the underlying rational expectations equilibrium is locally indeterminate. We suggest ways in which policymakers …

with unemployment and bargaining frictions. Shocks to long-run inflation expectations appear to account for much of the … expectations; in fact, conditions were deflationary all throughout the 1930s in spite of high money growth and low interest rates …

expectations, in particular. Some of the problems inherent in such an approach are illustrated by applying the standard tools of …

day-to-day changes in expectations of future US monetary policy, in the context of a study of day-to-day exchange rate … changes. We analyze more than 12 years of daily exchange rate data and show that continuous day-to-day changes in expectations …

This paper analyzes how the formation of expectations constrains monetary and fiscal policy design. Economic agents … the policy regime using historical data. Regime uncertainty substantially narrows, relative to a rational expectations … analysis of the model, the menu of policies consistent with expectations stabilization. When agents are learning about the …