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 language | English |
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Title of host publication | Macroeconomics at the Service of Public Policy |
Editors | Thomas Sargent, Jouko Vilmunen |
Publisher | Oxford University Press |
Chapter | 4 |
ISBN (Print) | 9780199666126 |
DOIs | |
Publication status | Published - 2013 |
Keywords
- Euler equation learning
- subjective and rational expectations
- intertemporal budget constraint
- temporary equilibria
- learning dynamics