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establishing certain features of monetary policy rules that facilitate learning, a comprehensive treatment of policy design for … learnability has yet to surface, especially for cases in which agents have potentially misspecified their learning models. This … learning true reduced forms of the economy is subject to potentially destabilizing errors. We then ask: can a central bank set …
Persistent link: https://www.econbiz.de/10005706334
Using a closed economy model with a flexible-price good and a sticky-price good we study the conditions under which interest rate rules induce real determinacy and, more importantly, the MSV solution is learnable in the E-stability sense proposed by Evans and Honkapohja (2001). We show that...
Persistent link: https://www.econbiz.de/10005537501