We explore the dynamic behavior of a New Keynesian monetary policy problem with expectations formed, partially, under adaptive learning. We consider two alternative cases: on the first setting, the private economy has the ability to predict rationally real economic conditions (the output gap)...

This paper offers the rationale for presenting a particular type of Phillips curve and develops the dynamic behavior of an economy where such a Phillips curve relation is observed. The specific kind of relation that is explored has similarities with the sticky-information Phillips curve of the...

This note characterizes the adjustment of the inflation rate towards a new steady-state, in response to a monetary policy shock. The sluggish nature of the adjustment is the straightforward outcome of the type of information dissemination one considers. Namely, firms will be grouped in clusters,...

Consider a network connecting individual agents that are endowed with distinct sentiments or ‘views of the world’. Specifically, assume that each node in the network contains an agent that, at a given period t, can be found in one of five states: sentiment neutrality, exuberant optimism,...