Article ID Journal Published Year Pages File Type
5099665 Journal of Economic Dynamics and Control 2010 28 Pages PDF
Abstract
We conclude that the movement away from fear of floating may not be explained by Bayesian or Robust policies. When the private sector anticipates the Central Bank's policy and endogenously determines the model, Central Banks may fall in a learning trap. An increase in financial volatility provides an escape to such trap that replicates patterns in the data.
Related Topics
Physical Sciences and Engineering Mathematics Control and Optimization
Authors
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