Article ID Journal Published Year Pages File Type
967529 Journal of Monetary Economics 2009 24 Pages PDF
Abstract
The impact of anticipated policy changes when agents form expectations using adaptive learning rather than rational expectations is considered. Agents are assumed to combine limited structural knowledge with a standard adaptive learning rule. These issues are analyzed using two well-known set-ups, an endowment economy and the Ramsey model. In our scenario there are important deviations from both rational expectations and purely adaptive learning. The approach could be applied to other frameworks.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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