LEARNING RATIONAL EXPECTATIONS IN A POLICY GAME

Rational expectations is a maintained assumption in the analysis of economic policy. Here we examine how two types of learning rational expectations (rational and econometric) affect the time profile of optimal policy. In both cases the government adopts policies which delay convergence to rational expectations. There is also a. reduction in the inflationary bias, in one case permanently in the other temporarily.


Issue Date:
Jun 06 1988
Publication Type:
Working or Discussion Paper
Record Identifier:
http://ageconsearch.umn.edu/record/268333
Language:
English
Total Pages:
25




 Record created 2018-02-14, last modified 2018-02-14

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