We analyze determinacy and stability under learning (E-stability) of rational expectations equilibria in the Blanchard … and Galí (2006, 2008) New-Keynesian model of inflation and unemployment, where labor market frictions due to costs of … policy rules based on current period inflation and unemployment our results are similar to those of Bullard and Mitra (2002 …

This paper considers a sticky price model with a cash-in-advance constraint where agents forecast inflation rates with … the help of econometric models. Agents use least squares learning to estimate two competing models of which one is … consistent with rational expectations once learning is complete. When past performance governs the choice of forecast model …

This paper explores the effects of central bank transparency on the performance of optimal inflation targeting rules. I … to the public. The paper shows that central bank transparency plays a crucial role in stabilizing the agents' learning …

This paper explores the effects of central bank transparency on the performance of optimal inflation targeting rules. I … to the public. The paper shows that central bank transparency plays a crucial role in stabilizing the agents' learning …

minorities, are highly heterogeneous in their expectations of inflation. We estimate a model of inflation expectations based on … learning from experience that also allows for heterogeneity in both private information and updating. Our model vastly … outperforms existing models of inflation expectations in explaining the heterogeneity in the data. We find that women, ethnic …

Survey data on inflation expectations show that: (i) private sector forecasts and central bank forecasts are not fully … aligned and (ii) private sector forecasters disagree about inflation expectations. To reconcile these two facts we introduce … dispersed information in a New Keynesian model, where as a result, inflation expectations differ between the private sector and …

The paper studies how a prolonged period of subdued price developments may induce a de-anchoring of inflation … learning, choosing among a set of alternative forecasting models. The analysis is accompanied by empirical evidence on the … properties of inflation expectations in the euro area. Our results also suggest that monetary policy may lose effectiveness if …

from initial beliefs, however, is more constrained. -- inflation ; monetary policy ; learning ; policy reforms … agents learn about the new policy via Bayesian updating, and we study how learning affects the nature of the transition and … temporarily explosive paths depends more on uncertainty about policy-feedback parameters than about the long-run inflation target …