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Evans, George W.; McGough, Bruce - Department of Economics, University of Oregon - 2005

be led to rules that generate indeterminacy and/or instability under learning. This problem is compounded by uncertainty …

Persistent link: https://www.econbiz.de/10005593754

Learning as a Rational Foundation for Macroeconomics and Finance

Evans, George W.; Honkapohja, Seppo - 2011

Expectations play a central role in modern macroeconomics. The econometric learning approach, in line with the cognitive consistency principle, models agents as forming expectations by estimating and updating subjective forecasting models in real time. This approach provides a stability test for...

Persistent link: https://www.econbiz.de/10014183715

Indeterminacy and Forecastability

Fujiwara, Ippei; Hirose, Yasuo - Crawford School of Public Policy, Australian National … - 2012

this phenomenon in the context of equilibrium indeterminacy in dynamic stochastic general equilibrium (DSGE) models. We … first analytically show that a model under indeterminacy exhibits richer dynamics that can improve forecastability. Then …, using a sticky-price DSGE model, we numerically demonstrate that indeterminacy arising from passive monetary policy …

Persistent link: https://www.econbiz.de/10011201596

The Stabilizing Virtues of Fiscal vs. Monetary Policy on Endogenous Bubble Fluctuations

Seegmuller, Thomas; Clain-Chamosset-Yvrard, Lise - 2013

We explore the existence of endogenous fluctuations with a rational bubble and the stabilizing role of fiscal and monetary policies. Consumers' credit constraints, the role of collateral and a portfolio choice are the key ingredients of our analysis. We consider an overlapping generations model...

Persistent link: https://www.econbiz.de/10010900272

Forward-looking monetary policy and anticipated shocks to inflation

Kapinos, Pavel - In: Journal of Macroeconomics 33 (2011) 4, pp. 620-633

explanations of the price puzzle—the cost channel of transmission of monetary policy and indeterminacy due to violation of the …

Persistent link: https://www.econbiz.de/10011065354

Heterogeneous expectations, indeterminacy, and postwar US business cycles

Ilabaca, Francisco; Milani, Fabio - 2020

postwar US macroeconomic data can be explained as the outcome of passive monetary policy, indeterminacy, and sunspot … windows and allowing the parameters to fall both in the determinacy and indeterminacy regions. The estimates reveal large … the sample. The results confirm that macroeconomic data in the early windows are better explained by indeterminacy, while …

Persistent link: https://www.econbiz.de/10012200338

Heterogeneous expectations in monetary DSGE models

Massaro, Domenico - In: Journal of Economic Dynamics and Control 37 (2013) 3, pp. 680-692

This paper derives a general New Keynesian framework with heterogeneous expectations by explicitly solving the micro-foundations underpinning the model. The resulting reduced form is analytically tractable and encompasses the representative rational agent benchmark as a special case. We specify...

Persistent link: https://www.econbiz.de/10010608462

Learning stability in economies with heterogenous agents

Honkapohja, Seppo; Mitra, Kaushik - 2002

An economy exhibits structural heterogeneity when the forecasts of different agents have different effects on the determination of aggregate variables. Various forms of structural heterogeneity can arise and we study the important case of economies in which agents' behavior depends on forecasts...

Persistent link: https://www.econbiz.de/10001703664

Optimal Monetary Policy When Agents are Learning

Molnar, Krisztina; Santoro, Sergio - 2010

Most studies of optimal monetary policy under learning rely on optimality conditions derived for the case when agents have rational expectations. In this paper, we derive optimal monetary policy in an economy where the Central Bank knows, and makes active use of, the learning algorithm agents...

Persistent link: https://www.econbiz.de/10014198313

Optimal Monetary Policy Rules : The Problem of Stability Under Heterogeneous Learning

Bogomolova, Anna; Kolyuzhnov, Dmitri - 2009

In this paper we extend the analysis of optimal monetary policy rules in terms of stability of an economy, started by Evans and Honkapohja (2003b), to the case of heterogeneous private agents learning. Following Giannitsarou (2003), we pose the question about the applicability of the...

Persistent link: https://www.econbiz.de/10014203533