Modern macroeconomics has been based on the paradigm of the rational individual capable of understanding the complexity of the world. Challenging this paradigm using simple rules of behaviour this book applies a new model to real-life macroeconomic problems.

We analyse the use of current and forward-looking data in the setting of monetary policy (Taylor rule). We answer the question of whether the use of forward-looking data is to be preferred over the use of current data. We use a behavioural macroeconomic model that generates periods of...