Are Non-Fundamental Equilibria Learnable in Models of Monetary Policy?

Preprint
Publisher Website
Google Scholar
  • 1 January 2004
    • preprint
      • Published in RePEc
Abstract
Recent models of monetary policy can have indeterminacy of equilibria, which is often viewed as a di±culty of these models. We consider the significance of indeterminacy using the learning approach to expectations formation. We employ expectational stability as a selection criterion for different equilibria and derive the expectational stability and instability conditions for forward-looking multivariate models, both without and with lags. The results are applied to several monetary policies.

This publication has 0 references indexed in Scilit: