Theories of learning and economic policy

George W. Evans

doi:10.3917/redp.313.0265

Theories of learning and economic policy

George W. Evans

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

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Abstract

The benchmark rational expectations (RE) assumption both assumes an unrealistic degree of rationality for economic agents and fails to address how agents would come to coordinate on an equilibrium. This essay reviews how theories of learning, and more specifically adaptive learning, address these issues and can lead to policy conclusions distinct from those obtained under RE. Applications discussed include monetary policy in New Keynesian models, the neo-Fisherian policy view, inflation targets, hyperinflation models, and macroeconomic policy to avoid stagnation at the zero lower bound.

Original language	English
Pages (from-to)	583-608
Number of pages	26
Journal	Revue d'Economie Politique
Volume	131
Issue number	3
DOIs	https://doi.org/10.3917/redp.313.0265
Publication status	Published - 9 Jul 2021

Keywords

Bounded rationality
Expectational coordination
Fiscal policy
Learning
Monetary policy
Stability

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10.3917/redp.313.0265

Evans_2021_REP_LearningAndEconomicPolicy_AAM
Copyright 2021 Editions Dalloz. This work has been made available online in accordance with publisher policies or with permission. Permission for further reuse of this content should be sought from the publisher or the rights holder. This is the author created accepted manuscript following peer review and may differ slightly from the final published version. The final published version of this work is available at https://doi.org/10.3917/redp.313.0265
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Cite this

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Theories of learning and economic policy

Abstract

Keywords

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