theoretical literature emphasises the existence of a separation principle between the first policy, which seeks to ensure monetary … event of temporary money demand shocks. During the first part of the crisis, the ECB acted in accordance with the separation … principle. However, it became increasingly difficult to apply as interest rates approached the zero-lower-bound. In effect, the …

policy ; separation principle ; Kalman filter ; optimal control …

myopic and the certainty equivalence policies. Free Keywords Learning, Rational Expectations, Separation Principle, Term … expectations, separation principle and term structure of interest rates Sylvester C W Eijffinger Department of Economics … estimating (learning) the impact of policy actions. Thus, the so-called separation principle does not 1Eric Schaling thanks …