Asymmetries in price adjustment can reconcile contrasts between rapid price movements in inflationary episodes, consistent with classical theories of flexible pricing, and sluggish price responses in contractions, consistent with Keynesian theories of sticky price adjustments. Both classical and...

Much of macroeconomics and finance employs stochastic difference equation descriptions of no-arbitrage or first-order conditions. A problem with empirical implementations of resulting present-values in the intertemporal decision rules and asset valuations of agents is that long-horizon forecasts...

In recent years, the learnability of rational expectations equilibria (REE) and determinacy of economic structures have rightfully joined the usual performance criteria among the sought-after goals of policy design. Some contributions to the literature, including Bullard and Mitra (2001) and...