interactions. Despite the fact that the rational expectations equilibrium (REE) is characterized by a simple pricing rule that …

expectations equilibrium due to successive waves of optimism and pessimism. We demonstrate how this heterogeneous-beliefs model can …

Under rational expectations monetary policy is generally highly effective in stabilizing the economy. Aggregate demand … management operates through the expectations hypothesis of the term structure --- anticipated movements in future short … incomplete markets. In this environment the expectations hypothesis of the yield curve need not hold, a situation called …

Agents have two forecasting models, one consistent with the unique rational expectations equilibrium, another that … the degree of expectations feedback in Muth's model of price determination. …

asset price behaviour, since the algorithm converges relatively fast to rational expectations. On the other hand, constant …

A central tenet of inflation targeting is that establishing and maintaining well-anchored inflation expectations are … public forms expectations and policymakers must formulate and implement monetary policy. Using an estimated model of the U ….S. economy, we show that monetary policy rules that would perform well under the assumption of rational expectations can perform …