Slobodyan, Sergey; Wouters, Raf - In: Journal of Economic Dynamics and Control 36 (2012) 1, pp. 26-46
We evaluate the empirical relevance of learning by private agents in an estimated medium-scale DSGE model. We replace the standard rational expectations assumption in the Smets and Wouters (2007) model by a constant-gain learning mechanism. If agents know the correct structure of the model and...