What is the impact of surprise and anticipated policy changes when agents form expectations using adaptive learning … rather than rational expectations? We examine this issue using the standard stochastic real business cycle model with lump …-shaped response, and tend to be prominently characterized by oscillations not present under rational expectations. These fluctuations …

What is the impact of surprise and anticipated policy changes when agents form expectations using adaptive learning … rather than rational expectations? We examine this issue using the standard stochastic real business cycle model with lump …-shaped response, and tend to be prominently characterized by oscillations not present under rational expectations. These fluctuations …

form expectations using adaptive learning rather than rational expectations (RE). The output multipliers for government …

What is the impact of surprise and anticipated policy changes when agents form expectations using adaptive learning … rather than rational expectations? We examine this issue using the standard stochastic real business cycle model with lump … oscillations not present under rational expectations. These fluctuations reflect periods of excessive optimism or pessimism …

What is the impact of surprise and anticipated policy changes when agents form expectations using adaptive learning … rather than rational expectations? We examine this issue using the standard stochastic real business cycle model with lump …-shaped response, and tend to be prominently characterized by oscillations not present under rational expectations. These fluctuations …

What is the impact of surprise and anticipated policy changes when agents form expectations using adaptive learning … rather than rational expectations? We examine this issue using the standard stochastic real business cycle model with lump …-shaped response, and tend to be prominently characterized by oscillations not present under rational expectations. These fluctuations …

This paper shows that the Ricardian Equivalence proposition can continue to hold when expectations are not rational and … are instead formed using adaptive learning rules. In temporary equilibrium, with given expectations, Ricardian Equivalence … holds under the standard conditions for its validity under rational expectations. Furthermore, Ricardian Equivalence holds …

This paper considers the Ricardian Equivalence proposition when expectations are not rational and are instead formed … Ricardian Equivalence to obtain, agents’ expectations must not depend on government’s financial variables under deficit …

expectations. We impose inflation and consumption lower bounds, which can be relevant when agents are pessimistic. The inflation … target is locally stable under learning. Pessimistic initial expectations may sink the economy into steady-state stagnation …. Following a severe pessimistic expectations shock a large temporary fiscal stimulus is needed to avoid or emerge from stagnation …