Notes on Agents’ Behavioral Rules Under Adaptive Learning and Studies of Monetary Policy

Seppo Honkapohja, Kaushik Mitra, George W. Evans

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

This chapter tries to clarify some discussions on the formulation of individual intertemporal behaviour under adaptive learning in representative agent models. The authors first discuss two suggested approaches and related issues in the context of a simple consumption‐saving model. Secondly, they show that the analysis of learning in the NewKeynesian monetary policy model based on “Euler equations” provides a consistent and valid approach.
Original languageEnglish
Title of host publicationMacroeconomics at the Service of Public Policy
EditorsThomas Sargent, Jouko Vilmunen
PublisherOxford University Press
Chapter4
ISBN (Print)9780199666126
DOIs
Publication statusPublished - 2013

Keywords

  • Euler equation learning
  • subjective and rational expectations
  • intertemporal budget constraint
  • temporary equilibria
  • learning dynamics

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