using existing macroeconomic models by modifying expectations about policy announcements. The main advantage of our method … incorporate information about future interest rate announcements: “inattention”, “credibility”, “finite planning horizon”, and …

Experience-Based Learning (EBL) that renders expectations heterogeneous across age groups. Under EBL, the age …-distribution directly affects the composition of aggregate expectations which gives rise to a novel channel by which the demographic …-independent expectations, we show that EBL weakens the pass-through of monetary policy on aggregate demand. This affects monetary policy …

. We investigate the model under different expectational assumptions: rational expectations, subjective expectations with … infinite-horizon learning, and subjective expectations with Euler-equation learning. Under rational expectations, the model … sensitive to the modeling of expectations, and they highlight learning as a key behavioral feature to understand macroeconomic …

interest rate rule, raising the possibility of inefficient fluctuations due to the dependence of expectations on extraneous … combine forward looking expectations and predetermined variables. We consider a variety of specifications that incorporate …

inflation targeting with target zones or tolerance bands. Private-sector agents form subjective expectations, update their … data on realized macroeconomic variables and survey data on expectations for four inflation-targeting economies: Australia … outside the band, and they always satisfy the Taylor principle. Private-sector expectations respond similarly to structural …

We analyze the individual and macroeconomic impacts of heterogeneous expectations and action rules within an agent …, we find that neither individual nor macroeconomic dynamics improve when agents replace myopic expectations with less … naïve learning rules. In fact, more sophisticated, e.g. recursive least squares (RLS) expectations produce less accurate …

interest rates, inflation and inflation expectations. Average-inflation targeting can approximate the price path observed under … policy rule. In particular, if the central bank considers more than two lags, subjects fail to form expectations that are … target helps somewhat anchor longrun inflation expectations. …