Learning about monetary policy rules

Kaushik Mitra, J Bullard

    Research output: Contribution to journalArticlepeer-review

    349 Citations (Scopus)

    Abstract

    We study macroeconomic systems with forward-looking private sector agents and a monetary authority that is trying to control the economy through the use of a linear policy feedback rule. We use stability under recursive learning a la Evans and Honkapohja (Learning and Expectations in Macroeconomics, Princeton University Press, Princeton, New Jersey, 2001) as a criterion for evaluating monetary policy rules in this context. We find that considering learning can alter the evaluation of alternative policy rules. (C) 2002 Elsevier Science B.V. All rights reserved.

    Original languageEnglish
    Pages (from-to)1105-1129
    Number of pages25
    JournalJournal of Monetary Economics
    Volume49
    Issue number6
    DOIs
    Publication statusPublished - Sept 2002

    Keywords

    • learning
    • monetary policy rules
    • expectational stability
    • optimal monetary policy
    • RATIONAL-EXPECTATIONS
    • MODELS
    • PERSPECTIVE

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