using existing macroeconomic models by modifying expectations about policy announcements. The main advantage of our method … incorporate information about future interest rate announcements: “inattention”, “credibility”, “finite planning horizon”, and …

inferences under rational expectations, whereas the fraction of backward looking price setters increases. …

Experience-Based Learning (EBL) that renders expectations heterogeneous across age groups. Under EBL, the age …-distribution directly affects the composition of aggregate expectations which gives rise to a novel channel by which the demographic …-independent expectations, we show that EBL weakens the pass-through of monetary policy on aggregate demand. This affects monetary policy …

unconventional policies that aim to increase households' spending directly through managing their expectations. We first show … theoretically and empirically that higher in ation expectations increase households' consumption. We then design a difference … demand via managing expectations. Whereas unconventional fiscal policy increases households' expectations and spending …

substantially. We document this fact by comparing an easy-to-grasp expectations-based policy, unconventional fiscal policy, with a … consumption via managing inflation expectations based on the Euler equation. Unconventional fiscal policy uses trivial … announcements of future consumer-price increases to boost inflation expectations and consumption expenditure on impact. Instead …

We study zero interest-rate policy in response to a large negative demand shock when long-run expectations can fall … over time. Because falling expectations make monetary policy less effective by raising real interest rates, the optimal … forward guidance policy makes large front-loaded promises to stabilize expectations. Policy is too stimulatory in the event of …

policy rules: the assumed manner of expectations formation. Following a considerable literature on learning, it is assumed … learning dynamics converge to the equilibrium predicted by rational expectations equilibrium analysis. This question is … Taylor rule ensures convergence to rational expectations equilibrium, if the so-called Taylor principle is satisfied, under …

past policy has no effect on expectations of future policy. However, when people's policy forecasts are based on the … expectations of future policy, and the time-consistent solution improves. Therefore, a successful policymaker needs to know how … present policy affects people's policy expectations …