The paper studies the conduct of monetary policy, in a simple new Keynesian model, with adaptive learning on the part … central bank has full information about the structure of the economy, including the adaptive learning mechanism. It takes the …, where we assume that the incumbent policymaker did not take the learning into account and allowed the expectation formation …

We consider optimal policy when private sector expectations are formed through adaptive learning. Earlier research has … found that adaptive learning is consistent with empirical evidence on private sector expectations. In this paper, we …