We incorporate adaptive learning-based inflation expectations in an Unobserved Components model in order to study the link between inflation and the output gap. The forward-looking New Keynesian Phillips curve serves as the backbone for modeling inflation dynamics. We find that learning based...

In the past fifteen years computational statistics has been enriched by a powerful, somewhat abstract method of generating variates from a target probability distribution that is based on Markov chains whose stationary distribution is the probability distribution of interest. This class of...