Are non-fundamental equlibria learnable in models of monetary policy?

Recent models of monetary policy can have indeterminacy of equilibria. which is often viewed as a difficulty of these models. We consider the significance of indeterminacy using (he learning approach to expectations formation. We employ expeciational stability as a selection criterion for different equilibria and derive the expeciational stability and instability, conditions for forward-looking multivariate models. both without and with lags. The results are applied to several monetary policies. (C) 2004 Elsevier B.V. All rights reserved.