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Some evolutionary foundations for price level rigidity
Saint-Paul, Gilles - 2002
alternative rules of thumb. In the model, firms must set their prices in face of aggregate demand shocks. Their payoff depends on … the level of aggregate demand, as well as on their own price and their neighbor s price. The latter assumption captures … rule that firms can easily adopt, the economy does not converge to the REE for highly autocorrelated aggregate demand …
Persistent link: https://www.econbiz.de/10011409938
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Inflation Targeting in a Learning Economy : An ABM Perspective
Salle, Isabelle - 2014
Simon (1971) [Simon, H., The Theory of Problem Solving, in 'IFIP Congress (1)', 1971, pp. 261-277]. Instead of assuming that …
Persistent link: https://www.econbiz.de/10013048357
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Mitigating the Forward Guidance Puzzle : Inattention, Credibility, Finite Planning Horizons and Learning
Groot, Oliver - 2020
This paper develops a simple, consistent methodology for generating empirically realistic forward guidance simulations using existing macroeconomic models by modifying expectations about policy announcements. The main advantage of our method lies in the exact preservation of all other shock...
Persistent link: https://www.econbiz.de/10012830239
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Mitigating the forward guidance puzzle : inattention, credibility, finite planning horizons and learning
De Groot, Oliver; Mazelis, Falk - 2020
This paper develops a simple, consistent methodology for generating empirically realistic forward guidance simulations using existing macroeconomic models by modifying expectations about policy announcements. The main advantage of our method lies in the exact preservation of all other shock...
Persistent link: https://www.econbiz.de/10012241145
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On the initialization of adaptive learning in macroeconomic models
Berardi, Michele; Galimberti, Jaqueson K. - 2016
We review and evaluate methods previously adopted in the applied literature of adaptive learning in order to initialize agents' beliefs. Previous methods are classified into three broad classes: equilibrium-related, training sample-based, and estimation-based. We conduct several simulations...
Persistent link: https://www.econbiz.de/10011573204
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Learning monetary policy strategies at the effective lower bound with sudden surprises
Krane, Spencer David; Melosi, Leonardo; Rottner, Matthias - 2023
We examine how private sector agents might learn a new monetary strategy that is adopted while at the ELB. Little can be discovered until the economy improves enough that rates would be near liftoff under the old strategy. Recessionary shocks would thus delay learning while large inflationary...
Persistent link: https://www.econbiz.de/10014330977
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Learning monetary policy strategies at the effective lower bound with sudden surprises
Krane, Spencer David; Melosi, Leonardo; Rottner, Matthias - 2023
Central banks around the world have revised their operating frameworks in an attempt to counter the challenges presented by the effective lower bound (ELB) on policy rates. We examine how private sector agents might learn such a new regime and the effect of future shocks on that process. In our...
Persistent link: https://www.econbiz.de/10014296448
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Central bank transparency and nonlinear learning dynamics
Eusepi, Stefano (contributor) - 2008
Central bank communication plays an important role in shaping market participants’ expectations. This paper studies a simple nonlinear model of monetary policy in which agents have incomplete information about the economic environment. It shows that agents’ learning and the dynamics of the...
Persistent link: https://www.econbiz.de/10003781685
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Optimal monetary policy when agents are learning
Molnár, Krisztina (contributor);  … - 2006
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/10003435154
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Optimal monetary policy when agents are learning
Molnár, Krisztina; Santoro, Sergio - 2010
We derive the optimal monetary policy in a sticky price model when private agents follow adaptive learning. We show that this slight departure from rationality has important implications for policy design. The central bank faces a new intertemporal trade-off, not present under rational...
Persistent link: https://www.econbiz.de/10003974493