We discuss the timing and strength of the Fed's reaction to the recent inflation surge within an estimated macroeconomic model where long-run inflation expectations are heterogeneous and can lose their anchoring to the target. The resulting inflation scare worsens the real cost of disinflation....

Social learning (SL) is a behavioral model in which expectations and the resulting aggregate dynamics stem from the interactions of a large amount of heterogeneous agents. Nonetheless, this framework has so far lacked micro-foundations and a general-solution method. This paper bridges these two...

Das zweite Kapitel trägt den Titel "Monetary and Fiscal Policy Interaction in a World with Heterogeneous Expectations."' Ein weiteres mal ist der Untersuchungsgegenstand die Fähigkeit einer Zentralbank, mittels Zinspolitik Preisstabilität in einer Ökonomie mit heterogenen Erwartungen...

The design and analysis of optimal monetary policy is usually guided by the paradigm of homogeneous rational expectations. Instead, we examine the dynamic consequences of implementation strategies, when the actual economy features expectational heterogeneity. Agents have either rational or...

This paper develops a theory of endogenously (non-)Ricardian beliefs. That is, whether Ricardian Equivalence holds in an equilibrium depends on endogenous private sector beliefs. The novelty here is a restricted perceptions viewpoint: in complex forecasting environments, agents forecast...