stabilization will be temporarily abandoned. However, this announcement reduces policy uncertainty and anchors inflationary beliefs … learning about the nature of these deviations. Under constrained discretion, only short deviations occur, agents' uncertainty … about the macroeconomy remains contained, and welfare is high. However, if a deviation persists, uncertainty accelerates and …

What are the effects of beliefs, sentiment, and uncertainty, over the business cycle? To answer this question, we …) and their beliefs may be influenced by their perceptions about future uncertainty. We estimate the behavioral model using … fluctuations. Shifts in perceived uncertainty can also affect real activity and inflation through a confidence channel, as they …