effect of surprise inflation on aggregate demand. We derive the optimal policy under active learning and compare it to two … limiting cases---certainty equivalence policy and cautionary policy, in which learning takes place passively. Our novel result … is that the two passive learning policies represent an upper and lower bound for the active learning policy, irrespective …

the degree of inflation persistence in a simple macroeconomic model, which incorporates rational learning by the central …Inflation-targeting central banks have only imperfect knowledge about the effect of policy decisions on inflation. An … important source of uncertainty is the relationship between inflation and unemployment. This paper studies the optimal monetary …

effect of surprise inflation on aggregate demand. We derive the optimal policy under active learning and compare it to two … limiting cases---certainty equivalence policy and cautionary policy, in which learning takes place passively. Our novel result … is that the two passive learning policies represent an upper and lower bound for the active learning policy, irrespective …

optimal policy. In particular, when there is uncertainty about the persistence of inflation, it is optimal for the central …

CEP, at low levels of inherited inflation the DOP resembles the CP. -- Learning ; inflation expectations ; disinflation … inflation expectations but learns about them from economic outcomes, which are in part the result of the disinflation policy … learning (DOP) and compare it two limiting cases---certainty equivalence policy (CEP) and cautionary policy (CP). It turns out …

with model misspecification. Learning induces an intertemporal trade-off for the central bank, i.e., stabilizing inflation …We study the impact of adaptive learning for the design of a robust monetary policy using a small open-economy New … possibility to conduct robust monetary policy is limited in a small open economy under learning for any exchange rate pass …

monetary effects on inflation and monetary growth determine the real value of money (or of government debt) in the long run …

monetary policy objective. We find that for the price of a strong hike in inflation a severe economic recession can be avoided …