expectations by way of learning. The inspection of output and inflation variances show that a policy of reacting to excess money …

We analyze the effects of social learning in a widely-studied monetary policy context. Social learning might be viewed … as more descriptive of actual learning behavior in complex market economies. Ideas about how best to forecast the economy … this more realistic learning dynamic. A key result from the literature in the version of the model we study is that the …

economy to recent choices of the interest rate. As a result of this learning process, the Fed faces greater uncertainty about … learning about the effect of its policy, consistent with the smoothness of interest rate movements found in estimated policy …

infinite-horizon learning, and subjective expectations with Euler-equation learning. Under rational expectations, the model … necessitates of large, possibly unrealistically so, degrees of myopia. The same result persists under infinite-horizon learning …, given that agents are still remarkably farsighted. But, under Euler-equation learning, the model can fit the data with only …