Empirical work in macroeconomics almost universally relies on the hypothesis of rational expectations (RE). This chapter departs from the literature by considering a variety of alternative expectations formation models. We study the econometric properties of a popular New Keynesian monetary DSGE...

This paper surveys the treatment of expectations in estimated Dynamic Stochastic General Equilibrium (DSGE) macroeconomic models. A recent notable development in the empirical macroeconomics literature has been the rapid growth of papers that build structural models, which include a number of...