We examine global economic dynamics under learning in a New Keynesian model in which the interest-rate rule is subject to the zero lower bound. Under normal monetary and fiscal policy, the intended steady state is locally but not globally stable. Large pessimistic shocks to expectations can lead...

We examine global economic dynamics under learning in a New Keynesian model in which the interest-rate rule is subject to the zero lower bound. Under normal monetary and fiscal policy, the intended steady state is locally but not globally stable. Large pessimistic shocks to expectations can lead...

We consider a simple general equilibrium model for the determination of asset prices together with full equilibria in the commodity and money markets. In this way portfolio aspects are introduced into a dynamic macro model which has many features from growth theory. Money holdings are modelled...