We develop a model of firm learning in volatile markets with noisy signals and test its predictions using historical … improvements from learning are faster where market signals are noisier. …

This chapter provides a survey of the recent work on learning in the context of macroeconomics. Learning has several … roles. First, it provides a boundedly rational model of how rational expectations can be achieved. Secondly, learning acts … as a selection device in models with multiple REE (rational expectations equilibria). Third, the learning dynamics …