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.
Original language | English |
---|---|
Pages (from-to) | 1105-1129 |
Journal | Journal of Monetary Economics |
Volume | 49 |
Issue number | 6 |
Early online date | 30 Aug 2002 |
DOIs | |
Publication status | Published - Sept 2002 |
Keywords
- Learning
- Monetary policy rules
- Expectational stability
- Optimal monetary policy