We estimate a New-Keynesian macro-finance model of the yield curve incorporating learning by private agents with … prices of risk are important features of the data. These features are, therefore, included in our learning model. The model … is estimated on U.S. data using Bayesian techniques. The learning model succeeds in explaining the yield curve movements …

New Keynesian theory identifies a set of principles central to the design and implementation of monetary policy. These …

active learning possibilities has effects on the optimal interest rate rule followed by the central bank. For a wide range of …

, results depend on the learning scheme that is employed. Here, the learning scheme we investigate is that of least …-squares learning (recursive OLS) using the Kalman filter. A novel feature of a learning-based policy - as against the central bank …